The Financial Reporting Council has launched a project to examine the lessons to be learned from the credit crisis and other developments which impact on corporate reporting, accounting and the auditing of non-financial services companies. A discussion paper is expected in the Autumn. Further information is available here.Friday, 30 July 2010
UK: FRC announces new project - lessons from the credit crisis
The Financial Reporting Council has launched a project to examine the lessons to be learned from the credit crisis and other developments which impact on corporate reporting, accounting and the auditing of non-financial services companies. A discussion paper is expected in the Autumn. Further information is available here.
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Only for the brave, here is a question on financial regulations.
Currently the financial regulators in the Basel Committee requires the bank to hold 8 percent when lending to unrated small businesses and entrepreneurs but only 1.6 percent when lending to triple A rated clients.
What would have happened if exactly the opposite capital requirements had been imposed? The banks having to hold instead 8 percent in capital when lending to triple-A rated clients and only 1.6 percent when lending to unrated small businesses and entrepreneurs.
It would most surely have created problems, any regulatory discrimination does, but I hold that a crisis as large as the current one would not have happened… since no gigantic financial crisis has ever resulted from excessive lending to those who are perceived as risky, they have always resulted from excessive lending to those who are perceived as not risky.
We could also have had a lot more of jobs, since almost always the next-generation of decent sustainable jobs is to be found among the current small businesses and entrepreneurs.
Our biggest financial systemic risk is without any doubt our financial regulators
Per Kurowski
http://www.subprimeregulations.blogspot.com/
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