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Fair Value Accounting is the Wrong Scapegoat for This Crisis. Bruegel Policy Contribution/May 2008

Veron, Nicolas (2008) Fair Value Accounting is the Wrong Scapegoat for This Crisis. Bruegel Policy Contribution/May 2008. [Policy Paper]

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    Abstract

    The ongoing financial crisis has spurred much finger-pointing at fair value accounting for financial instruments, as set out in both leading sets of accounting standards used by listed companies around the world, namely US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS). Prominent financial leaders such as Martin Sullivan, CEO of AIG, and Henri de Castries, CEO of AXA, have singled out fair value and the related wide use of mark-to-market accounting as a major factor in the crisis1. Echoing these views, European Commissioner Charlie McCreevy expressed his concern on 1 April this year about the ‘impact of mark to market valuation when markets generally become illiquid and irrational’2.

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    Item Type: Policy Paper
    Uncontrolled Keywords: Company law.
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on and consequences/reforms
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Bruegel (Brussels) > Policy Contributions
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 02 Jul 2008
    Page Range: p. 6
    Last Modified: 15 Feb 2011 17:53
    URI: http://aei.pitt.edu/id/eprint/8378

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