ESMA chairman speaks at IFRSF conference

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06 Jul 2011

Steven Maijoor, chairman of the European Securities and Markets Authority (ESMA), was a keynote speaker at the IFRS Foundation conference currently being held in Zurich.

He spoke about financial stability, investor protection, a level playing field in financial supervision, the supervision of credit rating agencies and a single rulebook for financial markets and showed the links between these topics and financial reporting.

Following are a few short extracts from his speech, however, we recommend reading the speech in its entirety. It can be found on the ESMA's website (5 pages, 44k).

On financial stability

"How could financial reporting best contribute to financial stability? Let us not forget that there is no unambiguous definition of financial stability. Nevertheless there seems to be a broad consensus that financial stability refers to the smooth functioning of the key elements that make up the financial system. In fact I believe that accounting standards do contribute to financial stability by providing clear principles on how to account for complex transactions, such as financial instruments, and by favouring transparency: transparency being key for good market functioning and good market functioning being an essential component of financial stability."

On investor protection

"[F]inancial reporting was developed out of the necessity to provide investors with adequate information on the financial performance and position on the company they are investing in. High quality financial statements are important for the good functioning of financial markets. It is therefore important that their views are heard and that they are involved in the IASB's standard-setting process. I am really supportive of the many initiatives the IASB has taken to reach out to investors and I believe the IASB should continue or even strengthen its efforts.


I acknowledge that the IASB has made significant steps in developing its outreach program. However, I also believe that we have now arrived at a point in time where having a comprehensive look at the different steps of the IASB's standard-setting process would have significant merit. This would include looking at how the various steps of the due process link together in the cycle as well as looking at better defining when the Board should re-expose. A full and transparent due process giving due consideration to market participant’s comments is the best guarantee for a smooth adoption of IFRSs.


Post 2011 the IASB should strive for a period of calm in accounting standards. The winding-down of the IASB-FASB convergence program, combined with a more rigorous agenda-setting activity could help achieving this. This should enhance stability and comparability across time of the financial information produced on the basis of IFRS, which should benefit all users of this information – investors, preparers and regulators."

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