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Volcker's View On IASB Independence
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Posted by: Jack Ciesielski 2/28/2005 9:00 AM
Remember Charlie McCreevy? He's the European Union internal market commissioner who had been lobbying the IASB for greater EU representation at the IASB. Blogged about him here a few weeks ago.

Charlie's - and the EU's - position: the IASB, and the International Accounting Standards Committee Foundation (IASCF) that governs it should have a more, well, European flair. As Charlie said in the Financial Times, the“representation within the international standard-setter and within a public oversight body should correspond more appropriately to jurisdictions that directly apply the standards."

That stance, as the IASCF reviews its constitution, is another thinly-disguised volley in the battle of the European banks and the IASB. Stateside, we don't see it much - but there has been a war over derivatives accounting every bit as nasty and political as our own here in the States on stock option compensation. (The particular bone of contention is IAS 39 - quite similar to Statement 133 here.)

Charlie McCreevy, meet Paul Volcker.

Friday, Mr. Volcker addressed the Accounting Regulatory Committee of the European Commission in Brussels. He handily rebuffed Mr. McCreevy and the European Commission:

"The decision of the European Union to enforce International Financial Reporting Standards (IFRS) by law provided bold and constructive leadership toward the concept of international, rather than national or regional, standards. It does not, however, logically lead to a decision to overweight European representation on the Board or the Committee. The “end game”, after all, is the acceptability of international standards right around the world. I have cited the strong momentum in that direction. The clear corollary is that Japan, China, India, other Asian countries, South American nations and others also want their views and experience reflected in Committee and Board discussions.”
[Emphasis added.]

This morning, the Dow Jones Newswires reports that the EU will not be giving up easily. No comment from Mr. McCreevy - yet.

Fortunately for the IASB and its constituents, they've got Paul Volcker. What happens when he retires in a year? This will not be an easy post to fill.
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