The 'High-level Group on Financial Supervision in the EU' has published its Report that makes 18 detailed recommendations to strengthen supervision of the EU's financial institutions and markets. The report addresses:
- how to organise the supervision of financial institutions and markets in the EU
- how to strengthen European cooperation on financial stability oversight, early warning, and crisis mechanisms; and
- how EU supervisors should cooperate globally.
Throughout the Report, accounting is cited as one of the causes of the current global financial crisis. The Report urges that the IASB or supervisors set limits on mark-to-market accounting:
To ensure convergence of accounting practices and a level playing-field at the global level, it should be the role of the International Accounting Standard Board (IASB) to foster the emergence of a consensus as to where and how the mark-to-market principle should apply — and where it should not. The IASB must, to this end, open itself up more to the views of the regulatory, supervisory and business communities. This should be coupled with developing a far more responsive, open, accountable and balanced governance structure. If such a consensus does not emerge, it should be the role of the international community to set limits to the application of the mark-to-market principle.
The following is Recommendation 4 of the Report:
Recommendation 4: With respect to accounting rules the Group considers that a wider reflection on the mark-to-market principle is needed and in particular recommends that:
- expeditious solutions should be found to the remaining accounting issues concerning complex products;
- accounting standards should not bias business models, promote pro-cyclical behaviour or discourage long-term investment;
- the IASB and other accounting standard setters should clarify and agree on a common, transparent methodology for the valuation of assets in illiquid markets where mark-to-market cannot be applied;
- the IASB further opens its standard-setting process to the regulatory, supervisory and business communities;
- the oversight and governance structure of the IASB be strengthened.
There’s only one thing I can argue with: civil society also needs to be represented since the stakeholders they represent are also key users of published financial information and as such should be represented in the regulatory process.
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One serious question. This “civil society” of which you speak. Exactly who are they? How are they selected?
For example, it’s painfully obvious that you and the Tax Justice Network have different ideas on tax than, say, the Adam Smith Institute do.
At one level we can say that both the TJN and the ASI are self selected groups attempting to argue their point in public. At another level we could argue that both groups are representing certain strands of public opinion.
Is there any metric by which we can decide that, say, the TJN should be a representative of “civil society” in such discussions and the ASI not? Or indeed vice versa?
“Because we’re right” (from either side) doesn’t really do it. “Because you’re for the rich/you’re statists” (adjust insult to taste) doesn’t really do it either.
I’m quite serious about this too. I can’t really see any method of deciding when the TJN should be considered to be part of that civil society that should be admitted to that top table and the ASI not, nor the other way around. Other than, well, how big a slice of public opinion do each represent and it appears to me that the way to decide that is through the traditional political process.
Anyone care to enlighten me as to why the TJN should be there and the ASI, IEA not? Oxfam yes but Cato no? Christian Aid yes and the Taxpayers’ Alliance not?
Tim
Let me offer you a simple analysis.
There are those in society who are support the vested interest. They do not need representation by civil society.
There are those in society who are oppressed by the vested interest. They do need representation by civil society.
There are those who oppose the concept of society. They do not need representation.
Oxfam, Christian Aid and TJN all fit in the middle category.
I leave you to decide whether you fit in the first or last. Either way, I can’t see you being present.
Richard
Well, please have a look at the members of the High Level Group on the financial crisis set up by the Council and the Commission to write recommendations for a response to the crisis. Its composition is a clear example of corporate capture. Of the eight men in the group, four are closely linked to financial giants like Goldman Sachs and bankrupt Lehman Brothers, a fifth was responsible for UK Financial Services Authority whose supervision of British bank Northern Rock failed miserably.
Read the report “Would you bank on them?” here:
http://www.corporateeurope.org/docs/would-you-bank-on-them.pdf
David
Agreed
And they still came up with some acceptable comments
That’s a measure of change
But they did ignore stakeholders – and that'[s why we have to carry on challenging the belief that more than 90% of society do not matter
Richard
“There are those in society who are support the vested interest. They do not need representation by civil society.
There are those in society who are oppressed by the vested interest. They do need representation by civil society.
There are those who oppose the concept of society. They do not need representation.”
I’m afraid that isn’t a satisfactory answer. You’ve just moved the question one recursion further back.
Who decides whether a group is supporting the vested interest? Who decides whether someone opposes the concept of society?
My vision of society, based very much on Burke’s little platoons is certainly different from what I assume is your’s, one based more on government and the State. Who is to decide which of these visions gets represented as a part of “civil society”?