In a letter to Commissioner Bolkestein the European Banking Federation lays out that further progress is needed on
IAS 39 before the European Union proceeds to endorsement. According to the
FBE the
IAS 39 hedging rules remain unduly complex and fail to present a model that has good resonance with the underlying objectives of risk management.
The present draft of IAS 39 is not satisfactory and cannot be considered as providing a fair and truthful information on the financial situation of companies that will use it.
As a prerequisite for endorsement satisfactory progress must be made towards a hedging model that provides a clear means of hedging risk arising from the core deposit base and a simpler means of judging effectiveness.
A similar letter has been sent among others to Sir David Tweedie, Chairman of the IASB, Mr Jaime Caruana, Chairman of the Basel Committee, and Mr Jean-Claude Trichet, Chairman of the European Central Bank,
Letter
© FBE
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