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Corporate Governance Briefing Book: Summer/Fall 2002 [3]
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Corporate Governance Briefing Book: Summer/Fall 2002 [3]
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2014-0373-F
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Thursday, May 28, 2015
FOIA Marker
This is not a textual record. This FOIA Marker indicates that material has been removed
during FOIA processing by George W. Bush Presidential Library staff.
Council of Economic Advisers
Kroszner, Randall (Randy) - Subject Files
Location or
NARA Number:
FRC ID:
OA Number:
Stack: Row: Sect.: Shelf: Pos.:
Hollinger ID:
W
30
14
5
3
5789
18724
2740
2841
Folder Title:
Corporate Governance Briefing Book: Summer/Fall 2002 [3]
Withdrawn/Redacted Material
The George W. Bush Library
DOCUMENT FORM
SUBJECT/TITLE
PAGES
DATE
RESTRICTION(S)
NO.
001
Report
IAS V GAAP: Principles V Rules?
3
N.D.
P5;
002
Report
FASB Proposal, "Principles-Based Approach to U.S.
1
10/21/2002 P5;
Standard Setting"
COLLECTION TITLE:
Council of Economic Advisers
SERIES:
Kroszner, Randall (Randy) - Subject Files
FOLDER TITLE:
Corporate Governance Briefing Book: Summer/Fall 2002 [3]
FRC ID:
5789
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRA]
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advise between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(8) Release would disclose information concerning the regulation of
2201(3).
financial institutions [(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
Deed of Gift Restrictions
concerning wells [(b)(9) of the FOIA]
A. Closed by Executive Order 13526 governing access to national
Records Not Subject to FOIA
security information.
B. Closed by statute or by the agency which originated the document.
Court Sealed - The document is withheld under a court seal and is not subject to
C. Closed in accordance with restrictions contained in donor's deed
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of gift.
2014-0373-F
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This document was prepared on Thursday, May 28, 2015
21
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DOWIONES
KPMG's U.S. Arm Must Stand Trial In Lernout Suits
Updated: Tuesday, August 27, 2002 11:11 PM ET
Printer-friendly version
BOSTON A federal court ruled that the U.S. arm of accounting firm KPMG must stand trial along with KPMG
Belgium in shareholder suits arising from accounting fraud at Lernout & Hauspie Speech Products NV.
The ruling by Judge Patti B. Saris of the U.S. District Court here greatly expands the possible pool of recoverable
assets for Lernout plaintiffs. It also further complicates the legal problems of KPMG, which is facing potential
liabilities for its role as auditor of other high-profile companies laid low by accounting scandals including Rite
Aid Corp. and Xerox Corp.
In her decision, Judge Saris cited a "panoply of 'red flags,' which "taken together is more than sufficient to
strongly support the inference that KPMG US acted with recklessness or actual knowledge" in helping prepare
Lernout's 1999 Form 10-K, which later proved fraudulent.
Lernout & Hauspie, a onetime European highflier that sold speech-recognition software, was based in Belgium
but had substantial U.S. operations. It filed for bankruptcy in 2001 after an audit revealed it had booked $373
million in phony revenue from 1998 to 2000.
In her ruling, Judge Saris excluded KPMG UK, KPMG Singapore and KPMG International, a Swiss verein, or
membership association, from the U.S. action, but denied motions to dismiss the suit against the Belgian and
U.S. unit. The U.S. audit firm had fought inclusion in the case, arguing that unlike KPMG Belgium, it hadn't
signed the audit reports.
Glen DeValerio, a partner at Boston law firm Berman DeValerio Pease Tabacco Burt & Pucillo, co-lead counsel
for the shareholders, said the ruling is "a very significant victory for all the plaintiffs," because of the size of the
U.S. accounting house. He said plaintiffs haven't specified damages, but he said that "it's in the billions," and
could be as much as $3 billion.
In New York, KPMG said "the allegations against KPMG are completely without merit," because "there was
massive fraud inside L&H" designed to fool both investors and auditors. It said it would defend itself "vigorously."
Judge Saris cited a number of allegations made in a shareholder class-action suit and in two separate suits
brought by holders of companies acquired by L&H as providing sufficient reason to include the auditors in the
suit. She noted that owners of two companies acquired by Lernout, who have also sued the auditors, said KPMG
U.S. representatives told them in conference calls that Lernout's accounting met U.S. standards.
She also cited other warning signs that plaintiffs have alleged: that Lernout had ignored a KPMG
recommendation that it write off $444,000 in obsolete inventory; that KPMG knew Lernout had limited KPMG's
ability to investigate allegations of false revenue recognition in foreign countries; that Lernout had issued a press
release about its financial results 13 days before the audit committee of the company met to discuss the results;
and that KPMG knew that the Securities and Exchange Commission had started an inquiry into Lernout
accounting practices.
She wrote that according to the allegations, Robert McLamb, a partner of KPMG's U.S. Capital Markets Group
who worked first in London and later in Houston, "played a pivotal role" in KPMG's Lernout reviews and in
making sure the results complied with generally accepted accounting principles. KPMG said Mr. McLamb wasn't
available to comment.
Write to William M. Bulkeley at [email protected]
Copyright 2002 Dow Jones & Company, Inc.
http://www.quicken.com/investments/news_center/article/printer.dcg?story-/news/stories/.. 8/29/2002
Quicken.com NewsCenter
Page 2 of 2
All Rights Reserved.
http://www.quicken.com/investments/news_center/article/printer.dcg?story=/news/stories/d. 8/29/2002
22
Crady Alexater
65
Allianz AG, Altana AG, BASF Aktiengesellschaft,
Bayer AG, DaimlerChrysler AG,
Deutsche Telekom AG, E.ON AG,
Infineon Technologies AG, Pfeiffer Vacuum Technology AG,
SAP AG, SGL CARBON AG
August 16, 2002
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0609
U.S.A.
Re: File No. S7-21-02 - Certification of Disclosure in Companies'
Quarterly and Annual Reports
Dear Mr. Katz:
We are submitting this letter in response to the request of the Securities and
Exchange Commission (the "Commission") for comments on the Commission's proposed
rules implementing specified statutory certification requirements for principal executive
officers and principal financial officers under Section 302 of the Sarbanes-Oxley Act of 2002
(the "Act"). 1 We appreciate the opportunity to comment on the matters discussed in the
Section 302 Release and the Original Prohosal.
I.
Introduction
We are a group consisting of several of Germany's largest New York Stock
Exchange-listed companies. We take the unusual step of writing to you as a group-te
emphasize our shared concerns about Section 302 of the Act.
I SEC Release No. 34-46300 (August 2, 2002). We refer to this release as the "Section 302 Release". The
Section 302 Release proposes changes to the rules and certifications the Commission proposed in June in SEC
Release No. 34-46079 (June 14, 2002). We refer to the earlier release as the "Original Proposal".
04 2002 WED PAA EVE 9064
DEC CORP F 111
We strongly favor the efforts of the U.S. Congress and the Commission to
restore the confidence of investors in the integrity and fairness of the U.S. financial markets.
The crisis in a number of major U.S. corporations threatens to diminish the significant
benefits for non-U.S. issuers of the U.S. markets, such as transparency, liquidity and stability,
that initially drew us there. We therefore are generally in support of policies, designed to
improve corporate governance and accountability to ensure that those benefits remain present
both in fact and in public perceptions.
Our corporations are organized under a body of corporate law that differs
significantly in numerous technical respects from the corporate legal regimes governing U.S.
corporations but which offers substantially equivalent safeguards for stakeholders. We do not
therefore believe it necessary, either under the terms of the Act or to achieve its goals, rigidly
to impose the same technical requirements on German and other non-U.S. companies as are.
imposed on U.S. companies.
II.
The Commission's Proposed Rules Should Not Apply to Foreign Private Issuers
In the Original Proposal, the Commission stated that the rules proposed in that
release would not apply to foreign private issuers² subject to the reporting requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and
provided a rationale for this conclusion. In the Section 302 Release, the Commission stated
that Section 302 of the Act also applies to foreign private issuers and that the Commission
therefore intended to adopt final rules that would apply the certification requirements to
foreign private issuers filing annual reports on Form 20-F. We believe that the language of
Section 302 should be, and its legislative construction and legislative history argue that it
must be, interpreted not to apply to foreign private issuers, and that the Commission should
therefore refrain from applying the certification requirements to them.
A.
The Arguments the Commission Advanced in the Original
Proposal Argue Strongly for the Exclusion of Foreign Private
Issuers from the Certification Requirements
In the Original Proposal, the Commission indicated several reasons for
excluding foreign private issuers from the coverage of the certifications requirement the
Commission was proposing at that time. It noted that Form 20-F under the Exchange Act
need only be signed on behalf of the company by any authorized officer (which generally
would include the principal executive officer or principal financial officer). Unlike Form
10-K under the Exchange Act, it does not have to signed bya company's principal
executive officer or officers, principal financial officer. controller or principal accounting
officer and a majority of the board of directors. In addition, as the Commission correctly
noted, imposing mandatory requirements regarding companies' internal procedures raises
several issues, since those requirements may be inconsistent with the laws or practices of the
foreign private issuers' home jurisdiction and stock exchange requirements.
The Commission accordingly concluded that applying the proposed rules to
foreign private issuers would raise additional issues that do not exist for domestic companies,
2 As defined in Rule 3b-4 under the Securities Exchange Act of 1934. Each of the companies joining in this
letter is a foreign private issuer.
09/04/2002 WED 14:34 FAA 202 942 9044
DEC CURP Fill
and decided not to require the certifications from foreign private issuers. This would
certainly be the case in Germany. As the Commission is aware, the body of a German
corporation that bears the majority of executive responsibilities is its management board, or
Vorstand. Under German corporate law, the management board itself, and not the
individuals comprising it, is the body responsible for corporate direction. Moreover, back in
1998, German law introduced the express requirement that the management board should
establish risk management systems and financial early warning procedures which comprise
effective internal control mechanisms. The effectiveness of such procedures must be
examined and evaluated by the company's auditors. In our view, this leads to results that are
comparable and equivalent to what is required by Section 302 of the Act. Finally, we note
that making false or misleading statements in publicly-released reports is already subject to
administrative and criminal sanctions under the German Commercial Code and the German
Stock Corporation Act.
The Commission has traditionally accommodated foreign issuers by refraining
from imposing undue burdens that would duplicate, or be inconsistent with, requirements
already imposed by their respective home country laws and thus might discourage them from
accessing the U.S. capital markets. For example, foreign issuers are generally not required to
file quarterly reports on Form 10-Q, or current reports on Form 8-K. Foreign issuers are
generally exempt from the proxy rules under Section 14 of the Securities Exchange Act and
from the reporting and short swing profit rules of Section 16 of the-Exchange Act.- Both the
NYSE and Nasdaq have exempted foreign issuers from certain listing requirements to
accommodate inconsistencies between home country practices and the standards applicable to
U.S. companies. At the same time, foreign issuers have been required to include in their U.S.
disclosure documents descriptions of the ways in which their internal governance procedures
and the legal regimes under which they operate differ from those to which U.S. issuers are
subject. This additional disclosure has provided U.S. investors with the information they
needed to make an informed decision about investing in the securities of foreign issuers,
while at the same time assuring U.S. investors that the local laws governing the foreign
issuers provide adequate controls and corporate governance procedures.
The latest corporate governance rule proposals from the NYSE and Nasdaq
reflect understanding for the differences between U.S. issuers and non-U.S. issuers. We
respectfully urge the Commission to continue its tradition of extending comity in this case-a
tradition that was important in convincing us to become U.S. registrants in the first place.
For these reasons, we recommend that the Commission not add true foreign
private issuers to the companies required to submit certifications under Section 302.
E.
The Legislative History and Structure of Section 302 Support
Differentiated Approach
At least one important element of the legislative history points to an
understanding that the Act was not meant to apply equally to domestic and foreign private
issuers. During the Senate conference debate to approve the final version of the bill, Senator
Enzi stated:
09/04/2002 WED 14:35 FAI 202 942 9064
SEC CURP FIN
In addition, I believe we need to be clear with respect to the area of
foreign issuers and their coverage under the bill's broad definitions.
While foreign issuers can be listed and traded in the U.S. if they agree
to conform to [generally accepted accounting principles in the United
States] and New York Stock Exchange rules, the [Commission]
historically has permitted the home country of the issuer to implement
corporate governance standards. Foreign issuers are not part of the
current problems being seen in the U.S. capital markets, and I do not
believe it was the intent of the conferees to export U.S. standards,
disregarding the sovereignty of other countries as well as their
regulators.
Section 302(a) of the Act specifies that the certification requirement is to
apply to "each company filing periodic reports under section 13(c) or 15(d) of the [Exchange
Act]". As such, the provision appears on its face to cover foreign private issuers which file
such reports. However, Section 302(a) should be read in the light of Section 302(b) and the
legislative history underlying the Act. Section 302(b) deals with the concern that U.S.
companies will reincorporate outside the United States in order to evade the certification
requirements. On its face, it assumes that reincorporating outside the United States would in
fact relieve the company of some or all of the requirements of Section 302(a). Were Section
302(a) read to apply identically to domestic and foreign private issuers, there would have
been no reason for Congress to include Section 302(b) to prevent domestic issuers from
circumventing the rules.
Because the wording of the Act and its legislative history do not clearly
indicate that the certification requirements of Section 302 must apply to foreign private
issuers, and in fact argue more persuasively that they should not, we request that the
Commission reconsider its Section 302 Release and exercisc its broad rulemaking discretion
to exclude foreign private issuers from the certification requirements.
We wish to emphasize that we are strongly in favor of good reporting
practices, and that we are conscious of the paramount importance of maintaining investor
confidence in the capital markets. We are concerned, however, that imposing the Section 302
requirements on true foreign private issuers will make the United States public capital
markets less attractive, even to corporations that are fully confident about the integrity of
their reporting systems. With the broadening of the Euromarket that has occurred over the
past several years and the availability of Rule 144A, we wonder whether, on balance, new
entrants will conclude that the benefits of a U.S. listing outweigh the uncertainties and risks.
We are also concerned that the departure from traditional principles of
policy/comity represented by some of the initiatives under the Act will lead to a
multiplication of inconsistent national regulatory initiatives with extraterritorial application,
resulting in a sctback for the globalization of the capital markets.
09/04/2002 WED 14:35 FAX 202 942 9624
SEC CORP FIN
III. Additional Suggestions
A.
Timing
Before any decision is reached to extend the certification requirements to
foreign private issuers, the Commission should conduct a detailed study of the potential local
law conflicts and the adverse consequences. The limited comment period between President
Bush's signature of the Act and the August 19 comment deadline is not sufficient time for
many foreign private issuers to respond. Some foreign private issuers may be unaware of the
call for comments before August 19, or unable to coordinate a timely and thoughtful response
within the time frame available. Moreover, we respectfully submit that further discussion
with European regulators may be useful before the imposition on foreign private issuers of a
change that represents such a radical departure from past practice. In light of the absence of a
clear mandate to extend Section 302 to true foreign private issuers, we believe the
Commission would risk significant adverse consequences for foreign private issuers and the
U.S. capital markets if it were to rush and extend Section 302 to foreign private issuers on the
same time frame as it is being applied to non-foreign private issuers.
B.
Form 6-K Reports
We note with satisfaction that in the Section 302 Release reference is made to
reports by foreign private issuers on Form 20-F, without reference to reports on Form 6-K.
We fully endorse the principle that if foreign private issuers are to be required to submit
certifications under Section 302, this requirement should remain limited to reports on Form
20-F.
*
*
*
We thank you for the opportunity to comment on the Section 302 Release.
We would be happy to discuss with you our comments or any other matters that you feel
would be helpful in your review of the proposal. We have very serious concerns about the
compatibility of other aspects of the Act (particularly with regard to audit committees and
corporate governance) with the requirem of German law, but we understand that your call
here is for comments on Section 302 of the Act, so we expect to address those other concerns
at a later date. Please do not hesitate to contact
Manfred Balz. Esa.
General Counsel, Deutsche Telekom AG
Friedrich-Ebert-Allee 140, D-53113 Bonn, Germany
(Phone: 001 49 228-1 81-74 000, Fax: 001 49 228-1 81-74 008),
Bernd Honsel. Esq.
General Counsel, Allianz AG
Königinstraße 28, D-80802 München, Genuany
(Phone: 001 49 89-38 00-22 34, Fax: 001 49 89-38 00-21 52),
23
FRB: Testimony, Olson -- The European Union's Financial Services Action Plan -- May 22, 2002 Page 1 of 6
The Federal Reserve Board
Testimony of Mark W. Olson
The European Union's Financial Services Action Plan
Before the Committee on Financial Services, U.S. House of Representatives
May 22, 2002
Thank you, Mr. Chairman, for the opportunity to speak today on matters relating to the
operations of U.S. banking organizations in the European Union. This is a time of
significant change within the European Union with the ongoing efforts to complete the
single market in financial services.
I join with my colleagues here today in welcoming the European Union's plans to make its
market more efficient and transparent. The United States has always been a strong supporter
of European unity as well as market reforms that eliminate unnecessary regulatory burden
and promote better functioning of markets and financial systems.
The Financial Services Action Plan of the European Union includes proposals that are
aimed at achieving these same goals. The FSAP involves a series of regulatory and
egislative measures designed to achieve, among other things, a single wholesale European
market; open and secure retail markets; and state-of-the-art prudential rules and supervision.
To further these goals, a number of directives have been or will be adopted that deal with
issues such as money laundering, investment services, implementation of new Basel capital
rules and international accounting standards, and supervision of financial conglomerates. I
will deal with the latter three areas later in my testimony. These directives, and all of the
other measures being adopted in the FSAP, will affect U.S. financial services firms with
operations in Europe.
The FSAP is intended to modernize and enhance the efficiency and structure of the
regulatory regime for financial services within the European Union. To the extent that the
FSAP achieves these goals, U.S. firms are well-positioned to offer innovative and efficient
services to customers throughout Europe.
At the Federal Reserve, we follow with interest changes to foreign bank regulatory and
supervisory systems and seek to understand how these systems affect the banking
institutions for which we are responsible. This is especially important in the European
Union, in which U.S. banking organizations have substantial operations. As of December
2001, 27 U.S. banking organizations operate in the European Union with aggregate EU
assets of over $650 billion. Moreover, 66 EU banking organizations conduct commercial
banking and other financial services in the United States with aggregate U.S. assets of over
$1.7 trillion
http://www.federalreserve.gov/boarddocs/testimony/2002/20020522/default.hm
10/31/02
FRB: Testimony, Olson -- The European Union's Financial Services Action Plan -- May 22, 2002 Page 2 of 6
These figures demonstrate that globalization is not a new concept or recent process. As U.S.
industry has expanded its foreign operations, U.S. supervision has had to evolve to take
bcount of the fact that our banks operate in many different legal and regulatory
environments. We have strengthened existing cooperative relationships with bank
supervisors in other countries and established new ones as U.S. banks continue to expand
their operations into other countries. At the Federal Reserve, we conduct bilateral
consultations with individual authorities and participate in international groups of financial
services supervisors. We engage our EU counterparts both bilaterally and through these
groups.
The Federal Reserve and the other federal banking agencies participate regularly in the
Basel Committee on Banking Supervision, which was formed in order to improve
communication and cooperation among supervisors of internationally active banks. Some of
the key achievements of the Committee include the 1988 Basel Capital Accord, which
created for the first time an internationally accepted standard for assessing levels of bank
capital. The Accord replaced an uneven system of national standards and has allowed banks
to expand internationally on more competitive basis. Similarly, the Committee adopted its
Minimum Standards for Consolidated Supervision in 1992, establishing the principle that a
bank should be subject to a supervisory regime in which its financial statements are
consolidated and subject to review by home country authorities. Both the Capital Accord
and the principle of consolidated bank supervision have become the internationally
recognized standards that bank supervisors should aspire to meet.
Nine of the member states of the European Union are also members of the Basel Committee
nd a representative of the European Commission participates as an observer. The Federal
Reserve and eight of these nine EU countries, and a European Commission observer, also
participate in the Joint Forum, a group established by the Basel Committee, International
Organization of Securities Commissioners (IOSCO), and the International Association of
Insurance Supervisors (IAIS). The Joint Forum discusses issues arising from the operation
of financial services conglomerates and has developed principles appropriate to the
supervision of entities that operate within financial groups. These group meetings, as well as
many working group meetings on specific issues, provide regular opportunities for U.S.
regulators to meet and discuss issues of common interest with European officials.
In addition to regular meetings of international groups, the Federal Reserve has
longstanding relationships with both national regulators in the European Union and staff of
the European Commission. For internationally active banking organizations with operations
in both the United States and the European Union, national supervisors may participate in
joint examinations of particular institutions, confer with each other on specific issues and
meet periodically to discuss an institution's operations or financial condition. Ongoing
communication is recognized as critical for effective supervision. Home and host countries'
interests are both furthered by dialogue and strong supervisory relationships.
Regular contact with Commission staff goes back to the 1980s when the EU considered and
adopted its Second Banking Directive, aimed at promoting the internal market by
establishing the so-called "European passport" for banks chartered in the EU. Under the
http://www.federalreserve.gov/boarddocs/testimony/2002/20020522/default.htm
10/31/02
FRB: Testimony, Olson -- The European Union's Financial Services Action Plan -- May 22, 2002 Page 3 of 6
passport, a bank chartered in one EU country is entitled to establish branches in any other
EU country under the authority and supervision of its home country rules. Since that time,
everal U.S. banks have taken advantage of this early EU regulation by establishing a local
bank in a European member state, which then used the "passport" to establish branches in
other EU member countries.
European subsidiaries of U.S. banks are able to take advantage of the passport under the
principle of "national treatment." National treatment generally means that a country
provides parity of treatment between domestic and foreign-owned firms, resulting in
equality of competitive opportunity. National treatment has long been the prevailing practice
with respect to foreign banks operating in the United States and this practice was
incorporated into statute in 1978 with the enactment of the International Banking Act (IBA).
This principle has also been incorporated in various trade agreements to which the United
States is alparty, such as the North American Free Trade Agreement (NAFTA) and the
General Agreement on Trade in Services (GATS). The EU member states are also
subscribers to the GATS and consequently to the national treatment principle it contains.
Implementing national treatment can be difficult precisely because one country is trying to
adapt its own legal and regulatory structure to a foreign firm that is incorporated in a
different home country environment. This is a challenge the Federal Reserve has faced over
the years as we seek to apply U.S. laws that were adopted for a system of bank holding
companies to foreign banks that generally do not have a bank holding company structure.
The United States also requires that a foreign bank be subject to comprehensive
consolidated supervision by its home country supervisor before it can buy a bank in this
country. Under this law, the Federal Reserve must evaluate supervision systems that are
ifferent from our own and yet ensure that we are fairly applying the principle of national
treatment.
U.S. private sector firms may be concerned about new regulatory and supervisory initiatives
in the EU because such proposals may require changes in existing operations and/or
reporting standards. There may also be a concern that initiatives designed for European
firms or industries would not properly take account of home country supervisory structures
or regulatory practices. Foreign banks have expressed similar concerns about U.S.
regulatory initiatives in the past. At the Federal Reserve, we have found that our open and
transparent regulatory process is crucial in helping us to understand how our proposals
affect foreign banks and where problems arise, and gives us useful information for
evaluating the merits of particular complaints. We have at times proposed regulations on
which foreign banks and their governments, including the European Commission, filed
adverse comments. These comments helped us to reevaluate our regulations and to
determine whether our supervisory and regulatory objectives could be achieved in a
different way, consistent with the principle of national treatment.
With respect to the implementation of the FSAP in the European Union, the European
Union has an obligation to ensure that the rules adopted are consistent with the principle of
national treatment. It is our expectation that the European Commission and the member
states will seek to do so. Federal Reserve staff has met with Commission staff to discuss a
http://www.federalreserve.gov/boarddocs/testimony/2002/20020522/default.htm
10/31/02
FRB: Testimony, Olson -- The European Union's Financial Services Action Plan -- May 22, 2002 Page 4 of 6
number of matters, including the application of the financial conglomerates directives to
U.S. banking organizations. The Federal Reserve is committed to continuing the dialogue
with the Commission on matters of mutual interest, both bilaterally and as part of financial
markets discussions led by the Treasury Department. We understand that the Commission
has begun to engage in industry consultation as part of the rule writing process and we
endorse a process that allows all affected institutions, including those that are foreign-based,
to participate actively in the process.
The FSAP has a far reaching agenda. I will comment briefly on three issues of particular
interest to U.S. banking organizations. With respect to the conglomerates directive, we
understand that the impetus for the directive came from the Joint Forum's principles for the
supervision of financial conglomerates. The three parent bodies of the Joint Forum (the
Basel Committee, IOSCO and the IAIS) were concerned that, although individual financial
companies within a group might be subject to prudential supervision, the consolidated
financial group might not be subject to appropriate oversight. This in turn could lead to
relationships or transactions that could pose financial risk to the regulated parts of the group.
The Joint Forum's principles were developed to help assure that there are no material gaps in
supervisors' understanding of inter-affiliate relationships within a financial group that could
ultimately result in financial instability. We understand that the EU financial conglomerates
directive is concerned with this same issue.
In the United States, U.S. banking organizations have long been subject to consolidated
supervisory oversight. We believe that the Federal Reserve's supervisory programs and
practices for bank holding companies, including financial holding companies, are fully
consistent with the requirements that are contemplated under the EU's financial
onglomerates directive.
With regard to the capital adequacy directive that is being developed for credit institutions
and investment firms in the European Union, we also believe that the ultimate product will
not present difficulties for U.S. banking organizations. The European Commission is
mindful of the work that is underway in the Basel Supervisors Committee to replace the
existing Basel Capital Accord with a more comprehensive risk sensitive framework for
assessing an organization's capital adequacy.
When the EU issued its capital adequacy directive for public comment in 2001, commenters
raised concerns about the regulatory burden that would be imposed on institutions that
would be subject to both the EU capital rules and the Basel capital rules at the national level.
The EU committee responsible for the capital adequacy directive has recognized this
potential burden and has taken steps to ensure that the EU directive is as consistent as
possible with the final revised Basel Accord. Technical working groups of the Basel
Committee have been communicating with the EU technical drafting groups with the
objective of harmonizing the two frameworks to the fullest extent possible.
The most sweeping changes in the Basel capital initiative are intended for internationally
active banking organizations. The EU capital adequacy directive is intended to apply to a
much wider range of institutions, both those with international operations as well as those
http://www.federalreserve.gov/boarddocs/testimony/2002/20020522/default.htm
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FRB: Testimony, Olson -- The European Union's Financial Services Action Plan -- May 22, 2002 Page 5 of 6
that are purely domestic. Thus, the capital adequacy directive will likely address EU specific
issues for smaller institutions. Internationally active European banks currently are subject to
he Basel capital rules as they have been adopted in individual countries, as well as to the
existing EU capital adequacy directive. Some differences between the two sets of rules do
exist. Supervisors, however, are aware of these differences and continually strive to
minimize the associated regulatory burden on institutions. Because the Basel revisions and
the EU capital directive revisions are underway in tandem with similar estimated time
frames for completion, there is a good likelihood that the final products will be substantively
and significantly more consistent than the current Basel and EU capital rules.
The FSAP also contemplates mandating adherence to international accounting standards.
Currently, banking organizations in the European Union may prepare their annual financial
statements in accordance with the accounting standards of the International Accounting
Standards Board (IASB), U.S. generally accepted accounting principles (U.S. GAAP),
and/or national standards. The use of U.S. GAAP is usually limited to those banking
organizations or other companies whose securities are publicly traded on U.S. stock
exchanges and are registered with the Securities and Exchange Commission. In many cases,
these companies will also provide separate financial statements based on their national
accounting standards and disclosure rules. The European Union will require all EU
companies listed on EU exchanges that are currently following national standards to follow
IASB standards by 2005 and will require those EU companies that currently follow U.S.
GAAP to adopt IASB standards by 2007. The EU is also working to adopt international
auditing standards for external audits of EU companies, including banks.
The IASB is now independent of the international accounting profession and independently
unded. It has adopted many of the structural elements of the FASB in the United States,
which are intended to promote an independent, objective standards-setting environment.
Many senior American accounting experts serve on the IASB and its staff. IASB GAAP has
many similarities with U.S. GAAP and the IASB plans to propose extensive enhancements
to its standards later this year.
The Federal Reserve has long supported sound accounting policies and meaningful public
disclosure by banking and financial organizations with the objective of improving market
discipline and fostering stable financial markets. The concept of market discipline is
assuming greater importance among international banking supervisors as well. The most
recent proposal of the Basel Committee to amend Basel Capital Accord (called Basel II)
seeks to strengthen the market's ability to aid bank supervisors in evaluating banking)
organizations' risks and assessing capital adequacy. It consists of three pillars, or tools: a
minimum risk-based capital requirement (pillar I), risk-based supervision (pillar II), and
disclosure of risks and capital adequacy to enhance market discipline (pillar III). This
approach to capital regulation, with its market-discipline component, signals that sound
accounting and disclosure will continue to be important aspects of our supervisory
approach.
The Federal Reserve and the other U.S. banking agencies are also actively involved in the
efforts of the Basel Committee to promote sound international accounting, auditing, and
http://www.federalreserve.gov/boarddocs/testimony/2002/20020522/default.htm
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FRB: Testimony, Olson -- The European Union's Financial Services Action Plan -- May 22, 2002 Page 6 of 6
disclosureistandards and practices for global banking organizations and other companies.
For example, an official of the Federal Reserve Board is a member of the Standards
Advisory Council that advises the IASB and its trustees on its projects, proposals and
standards. The U.S. banking agencies have been active in supporting the Basel Committee
in its work with the IASB's technical advisory groups to enhance the IASB's standards for
financial instruments and bank disclosures and the Basel Committee's projects with other
international groups to promote sound global bank auditing practices.
In conclusion, I believe that the European Union should be encouraged to continue its
program to strengthen and modernize the rules under which financial services firms operate
in Europe. This can only increase competition, enhance efficiency and contribute to
economic growth in the EU and globally. We are pleased that the European Commission is
broadening its consultation and comment processes on proposals being considered under the
FSAP. Supervisory and regulatory measures benefit significantly from an open and
transparent process in which affected companies may participate. We would expect that the
European Commission and member state national authorities will apply the FSAP's
measures to U.S. firms on a fair and national treatment basis.
U.S. banking organizations are dynamic and more than competitive with the rest of the
world. Accordingly, we are confident that U.S. firms will benefit from a strengthened and
more efficient European market for financial services.
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Financial services: Commission proposes Directive on prudential supervision of financial congl.... Page 1 of 3
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Financial services: Commission proposes Directive on
prudential supervision of financial conglomerates
The European Commission has presented a proposal for a Directive that would
introduce group-wide supervision of financial conglomerates. The proposal would
require closer co-operation and information sharing among supervisory authorities
across sectors. The proposal would also introduce initial steps to align the rules for
financial conglomerates with those for homogeneous financial groups (dealing in a
single financial sector, such as banking) so as to ensure equivalence of treatment and
a level playing-field. The proposal, a priority measure under the Financial Services
Action Plan, has been prompted by continuing consolidation in the financial services
sector that has created cross-sectoral financial groups with activities in both the
banking/investment services and insurance sectors The emergence of these groups,
known as financial conglomerates, requires an appropriate regulatory framework.
Internal Market Commissioner Frits Bolkestein, said: "This proposal represents an
important step forward towards an integrated European financial market and enhanced
financial stability. The proposed regulatory framework would benefit consumers,
depositors and investors in the European Union by stimulating financial market
efficiency and increasing competition."
The creation of financial conglomerates calls for careful consideration of structures for
containing and supervising risks arising in such groups. Cross-sector structures and
operations may amplify existing risks in one specific sector, as well as create new risks.
These risks should be adequately supervised. Where appropriate, inconsistencies between
sectoral financial legislation that give rise to loopholes and opportunities for
inappropriate circumvention of the regulations should be removed. The Commission's
proposal would therefore introduce specific legislation for the prudential supervision of
financial conglomerates. The three main objectives are:
To ensure that the financial conglomerate has adequate capital. In particular the
http://europa.eu.int/comm/internal_market/en/finances/cross-sector/conglomerates2.htm
10/31/02
Financial services: Commission proposes Directive on prudential supervision of financial congl(.. Page 2 of 3
proposed rules would prevent the same capital being counted twice over and so
used simultaneously as a buffer against risk in different entities in the same
financial conglomerate ('multiple gearing'). The proposal would also prevent
"downstreaming" by parent companies whereby they issue debt and then use the
proceeds as equity for their regulated subsidiaries ("excessive leveraging");
To introduce methods for calculating a conglomerate's overall solvency position
and
To deal with the issues of intra-group transactions, exposure to risk and the
suitability and professionalism of management at financial conglomerate level.
The proposal would also require Member States to ensure that an authority was
designated to coordinate between the different supervisors involved in the group-wide
supervision of financial conglomerates. The proposal thereby aims to enhance effective
supervision of supervisors, both within and across financial sectors and borders. Finally,
the proposal takes the necessary minimum steps to remove unnecessary inconsistencies
between the regulations for homogeneous financial groups and for financial
conglomerates, in order to ensure a minimum of equivalence in the treatment of these
groups.
Background
Current financial regulation is still very much sector-based and addresses primarily
homogeneous financial groups, namely those groups whose activities are limited either
to banking/investment or to insurance. The ongoing consolidation of financial
institutions, one of the most notable trends in financial markets over recent years, has led
to the creation of cross-sectoral groups across the EU. Financial conglomerates hold a
substantial share of the domestic financial markets in certain Member States. Some
financial conglomerates belong to the biggest groups in the EU financial markets and
provide financial services on a global basis. If the regulated entities in such a financial
conglomerate were to face financial difficulties, these could seriously destabilise the
financial system as a whole and adversely affect depositors, policy holders and investors
throughout the EU. Currently these cross-sector financial groups are inadequately
WHAT'S NEW
covered by existing legislation.
The implications for the supervision of banks, insurance undertakings and investment
MAIL-BOX
firms that are part of a financial conglomerate are now well recognised. The G-10 Joint
Forum on financial conglomerates issued in 1999 a set of recommendations on the
supervision of financial conglomerates. The proposal for a Directive takes account of
SITE MAP
consultations with Member States' experts and authorities and of the EU financial
services industry (consultation paper issued in December 2000). The need for such an
Az
INDEX
initiative was mentioned by the Economic and Finance Committee in its report on
Financial Stability, which was endorsed by the Economic and Financial Affairs Council
in May 2000.
SEARCH
http://europa.eu.int/comm/internal_market/en/finances/cros-sector/conglomerates2.htm
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INFORMATION
Date: 26 April 2001
For further information: [email protected]
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FORUM
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Goods ] - [ Services & Establishment ] - [ Financial Services ] - [ Company Law, Accounting & Auditing ]
- [ Public Procurement ] - [ Media, Information Society & Data Protection ] - [ Intellectual & Industrial
LINKS
Property ] - [ Economic & Monetary Union ] - [ Infringements ]
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25
COMMISSION OF THE EUROPEAN COMMUNITIES
* * * * * *
*
Brussels, 20.9.2002
SEC(2002) 995 final
2001/0095 (COD)
COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT
pursuant to the second subparagraph of Article 251 (2) of the EC Treaty
concerning the
Common Position of the Council on the adoption of a Directive of the European
Parliament and of the Council on the supplementary supervision of credit institutions,
insurance undertakings and investment firms in a financial conglomerate and amending
Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and
93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and
the Council
2001/0095 (COD)
COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT
pursuant to the second subparagraph of Article 251 (2) of the EC Treaty
concerning the
Common Position of the Council on the adoption of a Directive of the European
Parhament and of the Council on the supplementary supervision of credit institutions,
insurance undertakings and investment firms in a financial conglomerate and amending
Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and
93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and
the Council
1-
BACKGROUND
Date of transmission of the proposal to the EP and the Council
24 April 2001
(document COM(2001) 213 final - 2001/0095(COD)):
Date of the opinion of the Economic and Social Committee²:
17 October 2001
Date of the opinion of the European Parliament, first reading³:
14 March 2002
Date of adoption of the Common Position⁴:
12 September 2002
2-
OBJECTIVE OF THE COMMISSION PROPOSAL
The heightened tempo of internationalisation and consolidation in the financial sector,
together with the blurring of boundaries between financial sub-sectors, has lead to the
emergence of cross-sector financial groups involved in banking, insurance and securities
activities ('financial conglomerates'). In some Member States the importance of financial
conglomerates is quite significant and some of the biggest actors in the financial markets are
financial conglomerates. It explains why a number of Member States have started introducing
regulation and/or other supervisory measures at national level.
1
OJ. C213E-31/7/2001 p.227.
2
OJ. C36-8/2/2002 p.1.
3
Report A5-0060/2002.
4
9754/3/02 Rev.3
2
European legislation however has not kept pace with this market evolution. In particular, the
existing European legal framework for the supervision of financial institutions primarily deals
with 'homogeneous' groups of financial institutions (banking groups, insurance groups or
investment firm groups). A comprehensive set of rules on the prudential supervision of
'heterogeneous' financial groups combining institutions from the different financial sub-
sectors is lacking. As a consequence, there is no appropriate regulation of such groups at
conglomerate level. Therefore, the Financial Services Action Plan has identified legislation
for supervising financial conglomerates to be a priority measure.
The Commission proposal for a Directive aims at addressing a major loophole in financial
regulation by introducing a complementary supervisory regime for financial conglomerates
that supplements the existing sectoral rules for credit institutions, insurance undertakings and
investment firms. It will help to ensure European financial markets' stability and addresses
concerns about systemic risks. In doing so, the Directive will also implement the G-10 Joint
Forum recommendations regarding the supervision of financial conglomerates.
The main objectives of this Directive are:
- to ensure that financial conglomerates are adequately capitalised. In particular the
proposed rules would prevent the same capital being counted twice over and so used
simultaneously as a buffer against risk in different entities in the same financial
conglomerate ("multiple gearing'). The proposal would also prevent "down-streaming of
capital" whereby a parent company issues debt and uses the proceeds as equity for its
subsidiaries ('excessive leveraging');
- to introduce methods for calculating a financial conglomerate's overall solvency position;
- to deal with the issues of intra-group transactions and group-exposure to risks;
- to deal with the suitability and professionalism of management at financial conglomerate
level;
- to ensure adequate internal control mechanisms and appropriate risk management
processes in a financial conglomerate;
- to require Member States to ensure that one single authority is appointed for the overview
of each financial conglomerate and to ensure a co-ordination and proper exchange of
information between the different supervisors involved in the supervision of a financial
conglomerate's component parts;
- to introduce minimum steps to remove unnecessary inconsistencies between the
regulations for homogeneous financial groups and for financial conglomerates, in order to
ensure a minimum of equivalence in the treatment of these groups.
3
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Actions by FASB, IASB Praised
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IIES AND EXCHANGE COMMISSION
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U.S. Securities and Exchange Commission
MCMXXXIV
Actions by FASB, IASB Praised
FOR IMMEDIATE RELEASE
2002-154
Washington, D.C., October 29, 2002 The Chairman of the Securities and
Exchange Commission today applauded the decisions by the Financial
Accounting Standards Board and the International Accounting Standards
Board to work together toward greater convergence between U.S. Generally
Accepted Accounting Principles and international accounting standards.
"This is a positive step for investors in the U.S. and around the world," said
SEC Chairman Harvey L. Pitt. "It means that reducing the differences in two
widely used sets of accounting standards will receive consideration by both
boards, as they work to improve accounting principles and address issues in
financial reporting."
SEC Commissioner Roel C. Campos, who has been the Commission's
participant in recent meetings of the International Organization of
Securities Commissions, added: "I find it encouraging that interested
parties in all countries can contribute their thinking. It is clear that
investors globally could benefit to the extent that transparency and high
quality information might be provided by a common worldwide approach."
Chairman Pitt and Commissioner Campos noted that international
accounting standards have been a subject of interest for many years, and
that the subject has received increased prominence with the decision of the
European Union to adopt IAS in 2005, as well as similar actions being taken
or considered in a number of other countries. They also noted that an
effective infrastructure for interpretation and enforcement of accounting
standards, and cooperation among regulators, will be critical to realizing
the benefits of convergence.
"For years, many have believed that a desirable goal someday would be to
move towards a single set of high quality accounting standards around the
world," Pitt said. "Now the time frame has a more immediate focus. With so
many new users of IAS coming in 2005, in Europe and elsewhere, there is a
great opportunity to focus attention on ways to improve information for
investors while working for greater convergence in both the short term and
the long term."
http://www.sec.gov/news/press/2002-154.htm
10/29/02
Memorandum of Understanding
"The Norwalk Agreement"
At their joint meeting in Norwalk, Connecticut, USA on September 18, 2002, the Financial
Accounting Standards Board (FASB) and the International Accounting Standards Board
(IASB) each acknowledged their commitment to the development of high-quality,
compatible accounting standards that could be used for both domestic and cross-border
financial reporting. At that meeting, both the FASB and IASB pledged to use their best
efforts to (a) make their existing financial reporting standards fully compatible as soon as
is practicable and (b) to coordinate their future work programs to ensure that once
achieved, compatibility is maintained.
To achieve compatibility, the FASB and IASB (together, the "Boards") agree, as a matter
of high priority, to:
a) undertake a short-term project aimed at removing a variety of individual
differences between U.S. GAAP and International Financial Reporting
Standards (IFRSs, which include International Accounting Standards, IASs);
b) remove other differences between IFRSs and U.S. GAAP that will remain at
January 1, 2005, through coordination of their future work programs; that is,
through the mutual undertaking of discrete, substantial projects which both
Boards would address concurrently;
c) continue progress on the joint projects that they are currently undertaking; and,
d) encourage their respective interpretative bodies to coordinate their activities.
MEMORANDUM OF UNDERSTANDING - FASB and IASB
2
The Boards agree to commit the necessary resources to complete such a major
undertaking.
The Boards agree to quickly commence deliberating differences identified for resolution in
the short-term project with the objective of achieving compatibility by identifying common,
high-quality solutions. Both Boards also agree to use their best efforts to issue an
exposure draft of proposed changes to U.S. GAAP or IFRSs that reflect common
solutions to some, and perhaps all, of the differences identified for inclusion in the short-
term project during 2003.
As part of the process, the IASB will actively consult with and seek the support of other
national standard setters and will present proposals to standard setters with an official
liaison relationship with the IASB, as soon as is practical.
The Boards note that the intended implementation of IASB's IFRSs in several jurisdictions
on or before January 1, 2005 require that attention be paid to the timing of the effective
dates of new or amended reporting requirements. The Boards' proposed strategies will be
implemented with that timing in mind.
The Accounting Version of U.S. VS. Europe
By Paul Koster
09/05/2002
The Wall Street Journal Europe
Page A8
(Copyright (c) 2002, Dow Jones & Company, Inc.)
With the end of summer we can expect renewed interest in the supposed failings of U.S.
accounting standards, and criticism that they're too detailed and too rules-based. Indeed,
European Commission representatives are due back in Washington again this month to continue
promoting the supposed merits of Europe's main system, the International Accounting Standards
over the U.S. Generally Accepted Accounting Principles. But a word of caution might be
appropriate in this IAS promotion campaign.
In the eyes of its critics, GAAP's strict adherence to rules resulted in the Enron debacle. Frits
Bolkestein, the European commissioner for the internal market, has famously bragged that Enron
would not have been possible under IAS. The argument for IAS is that it's better equipped to
avoid misleading financial statements because auditors have to apply the "true and fair" override
principle.
This principle forces auditors to look at the total economic picture of the company as presented
in the financial statements, and to override an accounting standard if this standard would distort
the economic picture of the company and thus make the statement misleading. An application of
IAS so goes the argument would have forced Enron to include in its balance sheet its so-
called special purpose vehicles.
Enron created special purpose vehicles with the sole purpose, it now seems, to disguise debt on
its balance sheet. By finding equity holders with only 3% of the total equity to hold this debt,
Enron was allowed under U.S. GAAP to include these vehicles in the footnotes and to leave
them out of the balance sheet. This deprived investors of critical information about the economic
aspects of Enron's operations. Hiding these vehicles in the footnotes would, however, have been
a direct violation of the IAS "true and fair" test.
This is the bulk of the argument of those who suggest that the U.S. would do better to throw out
GAAP and introduce IAS. But far too much has been made of this true and fair override
principle. It is included in the spirit of GAAP if not in the wording, and this has had real-life
consequences.
In U.S. V. Simon, the Second U.S. Circuit Court of Appeals found three auditors guilty of fraud
after they certified fraudulent financial statements which were nonetheless in full compliance
with GAAP. The judge in that 1970 case wrote that "if literal compliance with GAAP creates a
fraudulent or materially misleading impression in the minds of shareholders the accountants
could and would be held criminally liable."
Even a strict application of GAAP supplemented by a statement on whether, in the opinion of the
auditors, a reader would have all the information necessary to understand what has truly
happened at the company, would make GAAP superior to IAS. This is why it is very unlikely
that the U.S. will be willing to consider abandoning GAAP in favor of IAS.
The American officials who meet the EU delegation would do well to remind their guests that
GAAP is the result of decades of development and practical experience, which have led to
incredible refinement (though admittedly, a result of this has been the inclusion of too much
detail, which sometimes can be confusing). IAS by comparison has just begun. One should not
just blithely ignore this difference in the experience level.
Not one of IAS's 34 standards -- which formulate rules to be observed in the presentation of
financial statements -- has ever benefited from being challenged in court or by regulators, mainly
because no company has been legally forced in Europe to comply with IAS yet. It won't be till
2005 that most European companies have to comply with IAS, a handful of companies having
been granted an extension till 2007. So it won't be for at least three years that we will start to see
European regulators and courts challenge the IAS.
Such challenges will start the refinement process that GAAP has endured for decades. With the
test of real life experience, the International Accounting Standards Board might discover that
some of the IAS accounting standards are too broadly defined and would require more rules to
explain them. This might make IAS in the end more similar to U.S. GAAP.
Rather than a wholesale adoption by one side of the other's standard, the U.S. and Europe might
try to focus on differences in a limited number of core standards that create the biggest chasm
between GAAP and IAS. The IASB is expected later this year to focus on some of these core
standards, including those dealing with the valuation of financial instruments, the treatment of
business combinations and accounting for share options. Down the line, the IASB is also
expected to take up leasing and revenue recognition.
If the U.S.-based Financial Accounting Standards Board and the European IASB are able to
reach a consensus on these core standards, wholesale adoption can be avoided. This would
amount to progress for companies, which could then be allowed to file under U.S. GAAP or IAS
without having to reconcile the two, provided the companies strictly adhered to these core
standards.
This suggested harmonization, limited to the four to five core standards, should be combined
with an serious attempt by the accounting standard setters to speed up the process of standard
setting. Accounting standards setters should keep pace with important economic developments
and trends, thus bringing investors better and more topical standards and a valuable contribution
to restore confidence in the financial markets. That's the better way to avoid another Enron.
Mr. Koster, an accountant, is a member of the executive board of the Netherlands Authority for
the Financial Markets.
28
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P5 Release would disclose confidential advise between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(8) Release would disclose information concerning the regulation of
2201(3).
financial institutions [(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
Deed of Gift Restrictions
concerning wells [(b)(9) of the FOIA]
A. Closed by Executive Order 13526 governing access to national
Records Not Subject to FOIA
security information.
B. Closed by statute or by the agency which originated the document.
Court Sealed - The document is withheld under a court seal and is not subject to
C. Closed in accordance with restrictions contained in donor's deed
the Freedom of Information Act.
of gift.
This Document was withdrawn on 5/28/2015
by erl
30