The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Euro banks face transitional derivative rules

European banks may have to have to use transitional accounting standards for up to two years even if the current disagreement over derivatives standards is resolved sooner, according to EU single market Commissioner Frits Bolkestein.

Derivatives accounting standards, proposed by the International Accounting Standards Board, are scheduled to enter force on January 1 2005 but there is still debate over their potential effect. French president Jacques Chirac claims they will introduce unacceptable "volatility" into financial statements. But the IASB, with the support of banks such as HSBC, believes the new rules are an important step towards convergence with the US. 

The two sides have failed to resolve their differences so the IASB has promised to look at new methodology to meet concerns over the accounting treatment of derivatives. But in the meantime, it plans to present information in a way that will reduce the impact on banks' balance sheets. The European Commission has given the IASB until the middle of June to do so.

But Bolkestein's statement that "we may have to agree on a temporary measure that would last for two years," suggests that it could be a while before the long term problem is dealt with.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree