The Rt Hon Gordon Brown MP
10 Downing Street
London SW1A 2AA
Dear Prime Minister:
We are writing to you in your role as host of the meeting of leaders of the G-20 nations on April 2 in London. We respectfully request that the Secretariat circulate this letter to all meeting participants.
As leaders of the G-20 nations meet to discuss strengthening the global financial system, we would like to bring to your attention the work underway by the Financial Crisis Advisory Group (FCAG).
The FCAG was established by the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) to advise the two boards about standard-setting implications of the global financial crisis and potential changes to the global regulatory environment. It consists of 18 senior leaders with broad international experience with financial markets, joined by official observers representing key global banking, insurance, and securities regulators. The chairmen and a few other board members from the IASB and the FASB also participate in the discussions. Attachment 1 lists the FCAG’s members and official observers.
The FCAG is considering how improvements to financial reporting may enhance investor confidence in the financial markets and is seeking to identify, and provide input and advice on, significant accounting issues that require the boards’ immediate attention or longer-term consideration. Topics being discussed include, among others, fair value (including ‘mark-to-market’) accounting, loan provisioning, and structured entities and other off-balance sheet vehicles. The FCAG is also examining the oversight of the boards, the standard-setting process in exigent situations, and the benefits of convergence of the two boards’ standards. As part of its work, the FCAG is considering various studies connected with the financial crisis, such as the US Securities and Exchange Commission’s study on ‘mark-to-market’ accounting, the UK Financial Services Authority’s Turner Review on the global banking crisis, and the Financial Stability Forum’s work on addressing procyclicality in the financial system, as well as the important communiqué issued by The Group of 20 finance ministers on March 14, 2009. The FCAG has also solicited written input from other interested parties. Attachment 2 contains the charge of the FCAG.
The FCAG expects to issue its report in July. We look forward to providing you with a copy of that report.
Harvey J. Goldschmid