"We have today therefore pledged to do whatever is necessary to:
· restore confidence, growth, and jobs;
· repair the financial system to restore lending;
· strengthen financial regulation to rebuild trust;
· fund and reform our international financial institutions to overcome this crisis and prevent future ones;
· promote global trade and investment and reject protectionism, to underpin prosperity; and
· build an inclusive, green, and sustainable recovery. " (full text here)
> Wow those guys certainly know how to build confidence! A new era of financial regulation and sustainable economics is born!
This is great! Or - it only it were true.
Indeed today showed some very worrying news for the sustainability of the financial system:
"The Financial Accounting Standards Board revised the rules to allow companies to use the judgment to a greater extent in determining the "fair value" of their assets. The board also made it easier for companies to avoid having to take impairment charges against earnings when they suffer losses on their investments." (WSJ)
Yes.
The guys who brought this mess upon us through incompetence or fraud are now allowed to value their "assets" themselves!
This will merely have the effect of decreasing transparency in the financial system, leading to more uncertainty and room for fraud, most likely prolonging the crisis and certainly not contributing to a sustainable solution.
