In the field of accounting, significant steps forward have been taken. In April 2005, the Securities and Exchange Committee (SEC) staff proposed a 'roadmap' towards eliminating the need for reconciliation to US GAAP for European firms by 2009. This roadmap, together with a joint work plan recently published by CESR and the SEC on the consistent application of accounting standards, go a long way towards the goal of removing the reconciliation to US GAAP requirement for EU issuers in the US.

On this side of the Atlantic, the European Parliament and the European Securities Committee (ESC) have recently approved the Commission's proposal that will enable US GAAP, Japanese GAAP, Canadian GAAP and other third country accounting standards that are converging towards IFRS to continue to be used for another 2 years in the EU. This brings the deadline to 2009, and thus aligns the EU and US timetables on this issue. This will also give recognition to other countries' efforts to converge towards IFRS, thereby promoting use of the international standards globally.

In the slightly longer term, both sides agree on the need for continued progress on the technical convergence of IFRS and US GAAP. If we can succeed in abolishing accounting reconciliation requirements, we will greatly reduce costs for transatlantic listed companies and create a more open transatlantic capital market. The success of the accounting standards convergence project will be an acid test for the EU-US relationship in financial services because it will test the fundamental proposition of whether we can converge our regulatory systems or not.