The meeting followed soon after last week's publication of the Joint Working Group of Banking Association's response to an international standard setter's paper that highlighted the opposing positions of both sides.International standards bodies, including the ASB, are pushing for banks to account using fair values across the board but the banks, in the UK represented by the British Banker's Association, are claiming that longer-term risks should remain on a historical cost basis.In the damning report, the banks criticised standards setters of ignoring their business needs and 'to accept such an approach would expose the banks to having to publish their financial statements using a measurement framework that suffers from severe practical difficulties and is flawed'.But ASB technical director Allan Cook said that there was no intention to steamroller the banks but that a constructive debate was needed to move things forward.'The banks are sticking to the traditional ways of looking at their businesses but the world in which they operate is changing all the time. At what point does it become necessary to change if you are going to reflect the risks that are out there?'But the BBA hit back, claiming that there was an underlying misconception in tying the use of fair values to management decisions.It would impair the reliability assigned to the financial statements by the capital markets while comparability between banks would also be reduced.
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