Basel Committee consultation on fair value option
15 Jul 2005
The Basel Committee on Banking Supervision has issued a consultative document Supervisory Guidance on the Use of the Fair Value Option by Banks under IFRSs that discusses supervisory guidance on banks' use of the IAS 39 fair value option.
Two key areas of supervisory guidance are addressed:
- What constitutes a set of sound risk management and control processes around use of the option?
- How might a bank's use of the option affect supervisory assessments of a bank's risk management systems and regulatory capital? The guidance suggests additional information that supervisors might collect to help them better understand how banks are using the fair value option and how this use impacts the supervisory assessment of banks' financial condition.
- Consultative Document (PDF 83k)
- Press Release (PDF 24k)