Undermining accounting rules

What are the Financial Accounting Standards Board's recent rule changes and what are their implications and potential risks for investors?

In the aftermath of a crisis spawned by staggering overvaluations in the markets for real estate and mortgage-backed assets, investment banks have arrived at a novel approach for dealing with similar crises in the future. In Europe and the US, industry interests have successfully campaigned to undermine fair value accounting rules that require banks to provide current and accurate assessments of asset values. In a recent report, the Financial Crisis Advisory Group (FCAG), an international panel consisting of leaders in business and finance policy, raises an alarm regarding these rule change...