and how much could it hurt the iasb?
rob lewis (pictured) at financeweek.co.uk makes five great points:
the iasb entered 2008 £3.5 million short of its annual budget… securing the remaining funding could prove difficult if cash-strapped financial institutions no longer see anything to gain from fair value now that the downturn has kicked in. or, indeed, from advancing a system of standards that some see as partly responsible for the market’s instability in the first place.- last week, aig’s chief executive, martin sullivan, complained that the group had no intention of selling its assets at the current prices. he argued that the current rules created a vicious circle in which companies incurred paper losses, lost the confidence of investors, and then had to raise funds in unfavorable market. lehman brothers and goldman sachs also wrote-down of $1.8 and $2 billion respectively.
- barney frank, chairman of the financial services committee in the house of representatives, has also asked for the fair value rules to be reconsidered.
- now that national economies may be at stake, reforming fair value has ascended the agenda.
- to what extent it will survive in its original incarnation remains to be seen.
full article, here.
