Mr Hoogervorst opened his speech with general comments how short-term horizons that seem to be detrimental to sustainable growth seem to dominate the financial markets and pointed out that there have been suggestions that accounting standards could be made more helpful for investors with a long-term perspective.

After a short excursion on accountability in general, Mr Hoogervorst turned to the question of whether and how IFRSs could support taking long-term views. He refuted the claim that "excessive use of fair value" had aggravated the financial crisis and he pointed out that fair value accounting had often provided "more timely information on the poisonous instruments that had been injected into the system". For the same reasons, Mr. Hoogervorst said, the IASB had rejected proposals regarding the forthcoming exposure draft on insurance accounting that would reduce volatility in an artificial way. According to the IASB chairman, closing your eyes to current developments because you have a long term goal would mean turning 'buy-and-hold' into 'buy-and-hope'.

Hoogervorst commented that "even long-term investors cannot afford to ignore short-term fluctuations, if only because you never know how short the short-term will be". There will always be the need to make continuous short-term corrections in order to arrive at the long-term goal and in order to find out whether these corrections are necessary you have to evaluate every day:

So, beware of people who tell you that they only care about the long term and who do not want to be bothered by market values. For a company to take a long term view, it has to be able to withstand the inevitable short-term fickleness of the market place.

In answering the question of how the IFRSs could support taking the long-term view, Mr. Hoogervorst closed on the remarks that the IASB cannot contribute to taking a long-term view by pretending short-term risks are not there. On the contrary, he said, IFRSs provide maximum transparency both for the short and the long term and thus offer the long term-investors the information they need at all times.

Please click for access to the full text of the speech on the IASB website.