RD News 6Dec11

• US May Not Fully Adopt International Accounting Standards 
• The US may only selectively adopt international accounting standards created by the International Accounting Standards Board (IASB). 
• Convergence of accounting rules is part of the G20’s initiatives for reforming financial markets, but has been hit with a number of setbacks, with deadlines increasingly pushed back as different agencies disagree about both substance and timing. 
• The SEC is set to make an announcement in the next few days as to which accounting standards it will adopt and which it will not. The IASB has said that it will make an “important” speech in response to any US announcement. 
• Possible system of so-called "condorsement" where each IASB rule is adopted individually rather than a wholesale switch -- an idea backed by the trustees of the U.S. Financial Accounting Standards Board (FASB).

• EBA: Andrea Enria: Towards an EU Single Rulebook

• Defends maximum harmonisation, highlighting capital requirements in particular, which have been a source of tension between the EU and UK authorities.
• Calls for “constrained discretion” in national macroprudential supervision.
• EC will soon issue a new Directive on crisis management and resolution.
• Regarding the “ultimate challenge” of supervisory convergence, the speech calls for a “Single Guidebook” for supervisors, which would define common procedures across Europe.

• Dan Tarullo on Dodd-Frank Act implementation
• ‘The best way to avoid another TARP is for our large regulated institutions to have adequate capital buffers, reflecting the damage that would be done to the financial system were such institutions to fail.’
• No decision has yet been made on whether the tougher capital guidelines for large U.S. banks that are not on the global bank list will be in the form of a quantitative surcharge.

• IMF working paper: Safeguarding Banks and Containing Property Booms 

• Assesses effectiveness of macroprudential policies against a number of different indicators of property sector activity and financial stability.
• At cross-country level the use of LTV caps decelerates property price growth.
• Both LTV and DTI caps slow property lending growth.
• LTV caps also affect a broader range of financial stability indicators in economies with pegged exchange rates and currency boards.
• LTV tightening could affect property activity through the expectations channel rather than through the credit channel.

• BoE: Introduction of the Extended Collateral Term Repo Facility

• New contingency liquidity facility, the Extended Collateral Term Repo (ECTR) Facility, designed to mitigate risks to financial stability arising from a market-wide shortage of short-term sterling liquidity.

• Fed Board: Announces Chs & DChs of Fed Reserve Banks for 2012