Did Basel III miss the point? The role of IFRS’s Other Comprehensive Income during the financial crisis PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Did Basel III miss the point? The role of IFRS’s Other Comprehensive Income during the financial crisis PDF full book. Access full book title Did Basel III miss the point? The role of IFRS’s Other Comprehensive Income during the financial crisis by Kenneth Born. Download full books in PDF and EPUB format.
Author: Kenneth Born Publisher: Anchor Academic Publishing ISBN: 3960676050 Category : Business & Economics Languages : en Pages : 53
Book Description
The broad consensus before the recent financial crisis was that the so called fair value accounting (FVA) improves transparency contrary to the historical cost model. Since 2008, the discussion has been on the root cause of the crisis, which lessons can be gleaned from it and how making the same mistakes again can be avoided. Basel III was implemented in order to improve the regulatory environment and was the response of regulators and politicians to public pressure and suspicions raised by the bail out programmes for banks. Consequently, an until then inconceivable number of new regulations and regulatory bodies were introduced. FVA was also blamed as part of the cause of the recent financial crisis. Available-for Sales (AfS) securities represent a major component of bank balance sheet asset. Gains and losses of AfS-positions are recorded within the Other Comprehensive Income (OCI). The OCI includes items which are not recognized (IAS 1.7) in income statements but increase or decrease a bank’s equity. The items also include income and expenses from Available-for-Sale positions (AfS) in accordance with IAS 39. On October 13th, 2008, an amendment to IAS 39 was published by IASB. This amendment did authorize the reclassification of assets. This amendment clearly demonstrates the influence of FVA on the value of assets of banks that apply IFRS. The main objective of this book is to verify the influence of OCI and whether the new regulations sufficiently capture this critical factor. Regulators should ensure that unrealized profits do not result in a capital drain. One way to assure this is to make OCI subject to a prudential filter and to deduct it from regulatory capital, which was the case until CRR became effective on January 1st, 2014 (CEBS guideline 2004). Basel III is even less strict than Basel II in that regard. Article 26(1) CRR clearly states that CET1 items must be recognized only in case they are really available to the financial institution for “unrestricted and immediate use to cover risks or losses as soon as these occur”. Nevertheless, with the introduction of the CRR, the prudential filter for positions that caused the financial crisis and led to poor capitalization of banks was not strengthened but actually removed. At present, CRR does not envisage any filter for unrealized gains parked in OCI.
Author: Kenneth Born Publisher: Anchor Academic Publishing ISBN: 3960676050 Category : Business & Economics Languages : en Pages : 53
Book Description
The broad consensus before the recent financial crisis was that the so called fair value accounting (FVA) improves transparency contrary to the historical cost model. Since 2008, the discussion has been on the root cause of the crisis, which lessons can be gleaned from it and how making the same mistakes again can be avoided. Basel III was implemented in order to improve the regulatory environment and was the response of regulators and politicians to public pressure and suspicions raised by the bail out programmes for banks. Consequently, an until then inconceivable number of new regulations and regulatory bodies were introduced. FVA was also blamed as part of the cause of the recent financial crisis. Available-for Sales (AfS) securities represent a major component of bank balance sheet asset. Gains and losses of AfS-positions are recorded within the Other Comprehensive Income (OCI). The OCI includes items which are not recognized (IAS 1.7) in income statements but increase or decrease a bank’s equity. The items also include income and expenses from Available-for-Sale positions (AfS) in accordance with IAS 39. On October 13th, 2008, an amendment to IAS 39 was published by IASB. This amendment did authorize the reclassification of assets. This amendment clearly demonstrates the influence of FVA on the value of assets of banks that apply IFRS. The main objective of this book is to verify the influence of OCI and whether the new regulations sufficiently capture this critical factor. Regulators should ensure that unrealized profits do not result in a capital drain. One way to assure this is to make OCI subject to a prudential filter and to deduct it from regulatory capital, which was the case until CRR became effective on January 1st, 2014 (CEBS guideline 2004). Basel III is even less strict than Basel II in that regard. Article 26(1) CRR clearly states that CET1 items must be recognized only in case they are really available to the financial institution for “unrestricted and immediate use to cover risks or losses as soon as these occur”. Nevertheless, with the introduction of the CRR, the prudential filter for positions that caused the financial crisis and led to poor capitalization of banks was not strengthened but actually removed. At present, CRR does not envisage any filter for unrealized gains parked in OCI.
Author: Alan Sangster Publisher: Routledge ISBN: 1317979842 Category : Business & Economics Languages : en Pages : 252
Book Description
This book presents the views of accounting educators, accounting education policy-makers, and accounting practitioners from across the world on the challenging topic of liberalising the accounting curriculum within university education. Accounting is a relatively new subject within universities and has been absorbed into a high level of education without any real attempt to do so within the traditional ethos of a liberal arts education. In this book, the logic of teaching using the liberal arts is described and contrasted with the practical vocational training approach of teaching which has formed the foundation of accountancy courses for many years. A proposal to change this established practice, by integrating the liberal arts into the university accounting curriculum, is followed by a series of short chapters which address the relevance, validity and worthiness of the proposed approach. Comments and counter-arguments are then discussed before further chapters illustrate how the proposed change may be achieved in a variety of different contexts – ranging from that of the global financial crisis (which began in 2008) to the inclusion of ethics and sustainability within the accounting curriculum. This book will aid those teaching accounting in universities to improve the design of their accounting degree programmes by moving away from an excessive emphasis on technical skills towards a broader consideration of a liberal contextualisation of the accounting curriculum. This book was originally published as a special issue of Accounting Education: an international journal.
Author: Mr.Stijn Claessens Publisher: International Monetary Fund ISBN: 1484336658 Category : Business & Economics Languages : en Pages : 39
Book Description
We identify current challenges for creating stable, yet efficient financial systems using lessons from recent and past crises. Reforms need to start from three tenets: adopting a system-wide perspective explicitly aimed at addressing market failures; understanding and incorporating into regulations agents’ incentives so as to align them better with societies’ goals; and acknowledging that risks of crises will always remain, in part due to (unknown) unknowns – be they tipping points, fault lines, or spillovers. Corresponding to these three tenets, specific areas for further reforms are identified. Policy makers need to resist, however, fine-tuning regulations: a “do not harm” approach is often preferable. And as risks will remain, crisis management needs to be made an integral part of system design, not relegated to improvisation after the fact.
Author: Roberto Di Pietra Publisher: Springer Science & Business Media ISBN: 1461480973 Category : Business & Economics Languages : en Pages : 424
Book Description
Since 1998, the world’s leading experts on accounting and regulation have convened in a series of workshops to explore and analyze emerging issues in the field. They have covered a wide array of topics, including corporate governance, auditing, financial disclosure, international standards boards, and the dynamics of markets and institutions. Most recently, they have focused on the role that accounting practices and policies may have played in the global financial crisis of 2008. In this volume, the editors showcase contributions from the workshops that represent the full spectrum of issues and perspectives relating to accounting and regulation. Each paper incorporates the most current examples and references to reflect the latest insights, with an emphasis on exploring future implications for theory and research, practice, and policymaking.
Author: International Monetary Fund. Monetary and Capital Markets Department Publisher: International Monetary Fund ISBN: 1498375898 Category : Business & Economics Languages : en Pages : 169
Book Description
This Detailed Assessment of Compliance on the Basel Core Principles for Effective Banking Supervision on Switzerland discusses that significant portions of guidance and legislation related to qualitative risk management and control standards are not as detailed or comprehensive as in many other major countries and need to be updated and selectively strengthened. Supervisory risk assessments and guidance to auditors, as the extended supervisory arm of the Swiss Financial Market Supervisory Authority (FINMA), need to be further materially improved, beyond what is now envisioned. Additional skilled resources within FINMA are necessary to meet these goals and to conduct more on-site supervisory work. The responsibilities and objectives of FINMA that emphasize protecting creditors, investors and insured persons, as well as ensuring proper functioning of the financial market, should be clearly stated in legislation as pre-eminent. It is recommended to increase FINMA resources, especially for on-site inspection and risk expertise. Clarify and limit the cases in which the Board can become involved in supervisory decisions and improve conflict code.
Author: Luc Eyraud Publisher: International Monetary Fund ISBN: 1513576518 Category : Business & Economics Languages : en Pages : 85
Book Description
Sub-Saharan African countries are facing an unprecedented health and economic crisis that is likely to severely hurt credit quality and raise non-performing loans from already high levels. Banks have a critical role to play not only during the crisis by providing temporarily relief to businesses and households, but also during the recovery by supporting economic activity and facilitating the structural transformations engaged by the pandemic.
Author: International Monetary Fund. Monetary and Capital Markets Department Publisher: International Monetary Fund ISBN: 1475589581 Category : Business & Economics Languages : en Pages : 160
Book Description
The Global Financial Stability Report examines current risks facing the global financial system and policy actions that may mitigate these. It analyzes the key challenges facing financial and nonfinancial firms as they continue to repair their balance sheets. Chapter 2 takes a closer look at whether sovereign credit default swaps markets are good indicators of sovereign credit risk. Chapter 3 examines unconventional monetary policy in some depth, including the policies pursued by the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank, and the U.S. Federal Reserve.
Author: Douglas D Evanoff Publisher: World Scientific ISBN: 9813223413 Category : Business & Economics Languages : en Pages : 385
Book Description
The Great Financial Crisis of 2007-2010 exposed the existence of significant imperfections in the financial regulatory framework that encouraged excessive risk-taking and increased system vulnerabilities. The resulting high cost of the crisis in terms of lost aggregate income and wealth, and increased unemployment has reinforced the need to improve financial stability within and across countries via changes in traditional microprudential regulation, as well as the introduction of new macroprudential regulations. Amongst the questions raised are:
Author: Kenneth Born
Author: Kenneth Born
Author: 
Author: Alan Sangster
Author: Mr.Stijn Claessens
Author: Roberto Di Pietra
Author: International Monetary Fund. Monetary and Capital Markets Department
Author: David Archer
Author: Luc Eyraud
Author: International Monetary Fund. Monetary and Capital Markets Department
Author: Douglas D Evanoff