In April 2008 the Financial Stability Forum (FSF) issued a report, Enhancing Market and Institutional Resilience [PDF], to the G7 Ministers and Central Bank governors. The report analyses the causes and weaknesses that have led to the current financial market turmoil and set out recommendations for increasing the resilience of markets in the future.
The report was the result of an intensive collaborative effort of many national bodies and international organisations, including the IASB. The report recommends actions in the following areas:
The report recommends that the IASB:
What are We Doing?
Guidance and disclosures about valuations
In its report, the FSF recommends that the IASB:
To this end, the IASB has created an expert advisory panel to discuss the valuation of financial instruments in inactive markets and the related disclosures. The discussions of the panel will provide input for the IASB’s work on financial instruments and fair value measurement.
Accounting and Disclosures for Off-balance Sheet Vehicles
The FSF recommendations relate to two projects, both of which the IASB had been working on before the current credit crisis developed:
The IASB is giving priority to these projects.
Along with the consolidations and derecognition projects, the IASB will review IFRS 7 Financial Instruments: Disclosures to assess its effectiveness in ensuring that entities disclose information that reflects their exposure to risk and any potential losses arising from financial instruments with the off-balance sheet entities with which they are involved.