And necessitated 238 billion euros of money to this day to be thrown

Is this so simple Is it enough to change the rules being set so that the financial crisis is turned off on its own First European Bank changed its accounting treatments in the third quarter, Deutsche Bank has decreased by 40 the amount of impairment losses that it ought to pass otherwise. Société Générale, if she did not immediately use the "joker", warned that it would be before the end of the year. In a week, 3 billion of losses were avoided by the banks that they left in the open breach mid-October by the independent professional body responsible for developing global accounting standards, the International Accounting Standards Board (IASB). Indeed, allowing some small arrangements between friends on the application of the "fair value" (1), which opened a Pandora's box.

On October 13, the IASB adopted an amendment to the IFRSs to EU banks freeze the value of certain assets at the date of July 1, and strongly slowing their own funds hemorrhage caused by 182 billion euros of writedowns in fifteen months. By accepting, under pressure from Governments, a dramatic reversal from its doctrine, the IASB brings itself water to the mill of detractors, who accuse IFRS standards have been one of the instruments of the spread of the crisis of the "sub-prime".

In the eyes of bankers and the insurers, the principle central to the IFRS, the "fair value" ("fair value"), designed for fluid financial markets and if possible to increase , became inoperative in markets in free fall and throttling. Rare broken award transactions which are forced to the players at Bay do reflect not the economic fundamentals of the products concerned. Plated on the regulatory requirements imposing a minimum of own funds to the banks, "fair value" created "the conditions for the wages of fear", accuses the President of the Executive Board of AXA, Henri de Castries. The integration of "immediate value" for the calculation of the amount of capital used in the long term by trades of financial transformation caused this huge explosion in the banks balance sheets. And necessitated 238 billion euros of money to this day to be thrown. In short, unable to markets to irrigate the activity of the banks, the "fair value" is transforming in "value fear."

Fearing to see completely dry up the tap of the credit, States are arranged as a single man behind these opinions. The European Commission intends to apply before the end of the year of new flexibility to the IASB. In the United States, the Constable of the award, should propose in January next to the Congress to adapt American accounting standards. It must prepare the ground for the purchase by the State of 700 billion of distressed bank assets. And not question in full recession, throwing taxpayer money in the mouth of the pac - man of own funds!

If it seems inevitable, the accounting aggiornamento opens under such political pressure does augur anything good for investors. They were the main beneficiaries of the transition to IFRS, which provided one value merchant of the company in its whole and its parts, almost instantaneous and relatively comparable with others. Proposals of twenty-seven Member States would "begin very seriously their confidence", recently highlighted the JP Morgan analysts, who fear a "race to the lowest accounting" between America and Europe. The IASB and its American counterpart, the Financial Accounting Standards Board (FASB), will attempt to regain control next Friday during a first round table in London. But bankers and insurers, who fear that the combination of IFRS with future European directive governing their creditworthiness leads to the same splatter cocktail, want to push their advantage by getting more flexibility on the handling of the "fair value".

It is not ideas that lack them. But none are perfect. Smooth market on six to twelve months With credit indices depressed for more than a year, the measure would have been ineffective. Surrender immediately, in a crisis, market ("mark-to-market") for the benefit of an estimate value of internal business ("mark-to-model") based on the fundamental analysis of the asset The process usually helps leaders "to adjust the parameters key and, thus, influence widely the value assigned to an instrument", observes the Economist Nicolas Véron, Member of the European think-tank Bruegel (2). As if to assess his house, an individual argued that rents have not declined to challenge the decline in the price per square metre... "If it is easy to identify the shortcomings of the"fair value", it is less obvious to propose an alternative method that best fulfill the requirements of relevance, reliability, essential understanding of financial accounting standards", said Nicolas Véron.

The debate is biased because the current crisis is not accounting, but although that risk management. In the transition to IFRS, banks have preferred the "cosmetic changes in financial presentation" to "minimize the volatility of their result", which could be "encourage a suboptimal risk management", prevent analysts from Merrill Lynch as early as January 2005, at the entry into force of these standards in Europe! The heart of the reflection must therefore focus on the thickness of the necessary own funds cushion to cushion sudden shocks. Manipulate the accounting thermometer can be now very tempting for States to recapitalize the banks. But the break definitively prevent them never to know what are those that can be saved, or when they will be healed.