Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-09-24-Speech-3-455"
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"en.20080924.37.3-455"2
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"Madam President, the need to improve the governance of the International Accounting Standards Board (IASB) is something that has long been recognised by the Commission, Parliament and the Council of Ministers. I have highlighted the importance of this on numerous occasions. I have been critical of the IASB’s lack of adequate consultation and feedback procedures, as well as the lack of impact assessments for new standards.
The reform of the IASCF governance currently being contemplated represents a step change in the accountability of this body to public authorities, something this House has repeatedly called for. I appeal to the European Parliament to support our proposals as the best way to ensure that this reform achieves real influence.
Given the IASB’s de facto role as a global standards setter, it is imperative its governance procedures are up to the highest standards. I want to get to the situation where we can adopt IFRS standards in the EU with full confidence that the process and content of these standards are exemplary. That is why, when I learnt that a revision of the constitution of the IASCF was envisaged, I set as a priority the improvement of governance.
You will recall last November, with my counterparts in the US Securities and Exchange Commission (SEC), the Financial Services Agency of Japan and the International Organisation for Securities Commissions, I proposed the creation of a monitoring board to ensure the public accountability of the IASCF.
We have made some good progress on this. The IASCF has recently proposed modifying its constitution in order to enter into a formal relationship with the proposed monitoring board. It accepts that this Board must have the power to participate in the nomination process of the IASCF Trustees and have the ultimate power to approve their appointment. It also accepts that the monitoring board will be able to address any area of work of either the Trustees or the IASB and refer them for consideration by the IASCF Board of Trustees or by the IASB.
The IASCF intends to reach a conclusion about these matters in early October, with changes to the IASCF constitution entering into force from 1 January 2009. This will, in particular, allow the monitoring board to become operational early in 2009. That is why I consider the time is now ripe to firm up on these proposals. If we leave it too late, we will not be able to reopen the governance issues.
The ongoing financial turmoil emphasises the need to ensure that accounting standards reflect the objectives of prudential supervision and financial stability. It has not proven possible to get agreement to have bodies such as the ECB in the monitoring board. As a compromise, we could envisage, in these new arrangements, that there would be an international accounting advisory group to advise the monitoring group on prudential and financial stability matters. This group should include both the European Central Bank and the Committee of European Securities Regulators and, no doubt, other relevant international bodies. Again, I am grateful to this House for having emphasised the importance of prudential supervision and financial stability in its resolution of 24 April.
In exercising its eventual role in the monitoring board, the Commission must also represent the other European institutions, in particular this House. To do so effectively, I would propose to draw up consultation procedures with the European Parliament. These procedures could, if necessary, be formalised in an appropriate form.
I have endeavoured to ensure that key MEPs were kept informed by my services about the evolution of this debate. It was, however, brought to my attention today that there was a lapse in this communication. Apparently, in preparing our position, events that took place towards the end of July were not communicated by my services in the usual manner, because of the holiday period. I know that there is widespread dissatisfaction in this House about the fact that you were not properly consulted during the elaboration of our proposals. I am also dissatisfied by this fact and have given clear and firm instructions to my services not to repeat such a mistake again. I believe my Director-General has been in contact with Mrs Berès to try and explain this omission. I hope that this oversight will not jeopardise the common goal we have both been striving for, namely, a better governance regime for the IASB.
With some further improvements, I am confident that these enhancements to the IASCF’s governance will improve the quality of accounting standards and ensure that they meet the needs of all stakeholders – including the European Union, which to this date remains the largest user of IFRS."@en1
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