Accounting standards need scrutiny to make sure banks behave
Posted,5/8/2013 12:00:00 PM
Conservatives MEPs today called for the regime for global accounting standards to be held up to thorough international scrutiny in light of the central role it played in causing the financial crisis. The MEPs a series of key questions at a hearing in the European Parliament on the future of International Financial Reporting Standards. With the European Commission set to commit to another six years of funding for both the International Accounting Standards Board and the European Financial Reporting Advisory Group - the bodies which respectively write the standards and grant them the EU's legal endorsement - the hearing flagged up several major areas requiring attention on in depth. Host Syed Kamall MEP, Conservative MEP for London, said: "It cannot just be business as usual. We need to be sure we get to a regime which is clear and simple but also thorough and a powerful tool for better governance. Time is passing and this needs addressing now." International Financial Reporting Standards (IFRS) are globally-recognised accounting standards that have been used in the EU for the accounts of banking groups and other listed companies for more than 20 years. Some investors believe that their complexity allows banks to misrepresent the reality of their balance sheets, making it hard to know what may be wrong with their finances. Some of the standards are said to have contributed to the crisis, in particular those relating to how derivatives and losses on loans are recognised on balance sheets. Dr Kamall, Conservative MEP for London, believes that fresh call for European banks to be stress-tested once more, to identify possible capital shortfalls, means transparency in banks' balance sheets should be top priority for the Commission. He has been fighting hard to raise awareness of the issue at a European level. At today's event, organised by the Association of Certified Chartered Accountants, he said: "The European accounting model has developed over several centuries and is about far more than simply providing information to the capital markets" "Accounts in this context are drivers of better governance, not just about information for investors." "It is important to discuss the extent to which IFRS, which run up to several thousand pages of rules, can achieve these aims. Often the more rules there are, the easier they are to get around." "The G20 commitment is to strengthen the global financial system. We have to ask ourselves whether converging around complex, wordy accounting standards is something that will stave off future crises."
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Conservative negotiator vows to resist "misdirected" proposals on fund-manager bonuses
Posted,3/21/2013 1:00:00 PM
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Conservatives condemn "wrongheaded" proposal to cap fund-manager bonuses
Posted,3/19/2013 1:00:00 PM
An EU plan to extend bonus-capping powers into the field of investment management has been condemned by Conservative MEPs
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Work of telecoms charity highlighted
Posted,1/12/2012 10:00:00 AM
Dramatic photographs from disaster and war zones across the globe went on display this week at the European Parliament - but the scenes were of hope and progress thanks to a telecommunications charity. The exhibition, Communications for Life, depicts the work of Telecoms Sans Frontieres (TSF) and its launch in Brussels was hosted by supporter Syed Kamall, Conservative MEP for London. He spoke of the charity's excellent work in setting up digital networks in disaster-stricken areas. TSF supports communication networks for rescue teams and emergency aid programmes and also allows people caught up in the devastation to contact loved ones. The charity has worked on the ground in Chile, Libya, Thailand, Haiti, Pakistan, El Salvador and Turkey. Mr Kamall said that in times of uncertainty, stress and lack of information, the provision of telecoms services was a vital part of relief work. "TSF facilitates the work of the other NGOs that go in...but they also then stay behind to put a proper communications infrastructure in place, often in very remote and vulnerable areas," he said. You can see some of the photographs here: http://www.flickr.com/photos/73701065@N07/sets/72157628747272113
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EU audit proposals must not undermine audit quality
Posted,11/30/2011 1:00:00 PM
As the European Commission today publishes proposals to reform the audit market in the EU today, the parliament's rapporteur (lead member) on them has said that he wants to ensure that competition is working in the auditing sector, but warns that the EU must think through any unintended consequences from its actions if it over regulates. Syed Kamall, Conservative MEP for London, has said that he will approach the process with an 'open mind' and if investors and audit clients identify problems in the auditing sector, he will aim to address them. However, he says that he wants to hear from companies and investors on whether the auditing sector is broken and if they believe that the 'Big 4' auditing firms should be subjected to "artificially imposed" competition via structural changes. He said: "I am starting this process with an open mind. There may be a case for tackling the dominance of the Big 4 and finding ways to improve auditing quality but I want to hear from investors and companies whether they believe that the current auditing system is broken. After all, the last directive dealing with audit has yet to be fully implemented in many member states. "There could be significant unintended consequences if we legislate more than absolutely necessary. "I'm also not sure that dealing with the dominance of the Big 4 audit firms in this context is the right approach. The OFT has just referred the Big 4 to the Competition Commission in the UK, making clear that competition issues should be dealt with by competition authorities. I would have expected perceived competition issues to have been dealt with by the competition directorate rather than the busy internal market directorate. "If there are genuine problems in the audit market then we should find genuine solutions for them. However, we should avoid imposing "knee jerk" solutions or forced competition which ultimately could make the auditing market weaker."
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