More Bankers Push Regulators to Delay Credit Losses Standard
The American Bankers Association and 50 state bank associations appealed to the Financial Stability Oversight Council (FSOC) to delay the implementation of FASB’s credit loss accounting standard, as they believe the standard would curb lending in a tight economy. The request follows other pleas from bank trade groups to pressure FASB and regulators to make changes to the standard or hold off on requiring banks to follow it. The bankers told Treasury Secretary Steven Mnuchin it was “imperative” that regulators study the economic and public policy implications of the new accounting standard, including how it could affect the stability of the banking sector, before banks must begin complying with it in 2020. The Treasury Department did not respond by press time to an inquiry seeking comment. FASB repeated the same statement it issued when the Bank Policy Institute sent its similar request to FSOC, saying the board will “continue to work with these organizations to ensure a smooth and effective implementation of the standard, and stand ready to answer any questions as they arise.” The SEC declined to comment.
Delay of Insurance Standard’s Effective Date Unlikely
The IASB’s members have little interest in agreeing to the requests from global insurance companies to change key pieces and delay the effective date of the board’s insurance accounting standard. Many insurance companies have expressed frustration with the complexity of the new standard and the costs to comply with it, but the accounting board has met with many investors who believe that the new guidance is important and should be implemented on schedule. “The prospect of further changes and delays will only be met with further dismay from investors,” said IASB member Nick Anderson, who said board members met with more than 500 investors and securities analysts in the course of developing the standard, and most embrace the transparency and consistency in financial reporting the amended guidance offers. “They have waited long enough.” IASB Chairman Hans Hoogervorst said he considered the questions about IFRS 17 with “a heavy heart.” “I would really hope that we could get this standard in function before the next financial crisis, and I really don’t mean that flippantly,” Hoogervorst said.
Baumann Withdraws from IAASB Chair Position
Former PCAOB chief auditor Martin Baumann has decided not to assume the position of chair of the International Auditing and Assurance Standards Board (IAASB) for personal reasons, the international board announced on October 26. On September 14, the IAASB had appointed Baumann to become chair for a three-year term, beginning in January 2019. “I am disappointed that unforeseen personal circumstances will prevent me from taking on this important role,” Baumann said in a statement. “I remain impressed with the public interest work that the IAASB has already achieved and continue to see remarkable opportunities for the future.” The IAASB said the interim nominating committee, which was formed by the monitoring group in February, will again search for a chair for the 2019–2021 term. The monitoring group is an international panel of financial regulators that oversee the International Federation of Accountants (IFAC), the IAASB’s parent organization.