This week, the Financial Times asked at the end of their Tuesday opinion piece whether some elements of Basel II that are contributing to pro-cyclicality of the credit cycle and elements of fair-value accounting should temporarily be suspended. Today it was reported that the Financial Services Authority (FSA) in the UK has held ’round table’ meetings with banks and leading auditors to discuss fair value accounting as part of its analysis of valuation techniques in the current market turmoil. Last week we invited a group of professionals involved in risk management to share their opinions about fair-value accounting and whether it has contributed to the current credit contraction. Results follow.
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