Patrizia Baudino, Raihan Zamil, 30 September 2019

Non-performing assets are a double-edged sword. On the one hand, they often trigger episodes of financial crises. On the other, once a crisis erupts, market participants must have confidence in banks’ reported asset quality metrics in order to regain faith in the financial system. This column shows that accounting standards and prudential frameworks to identify and measure non-performing assets vary widely across countries. This presents a challenge for comparing credit risk across banks and countries, for which the column proposes a range of policy options. 

Christian Thimann, 10 October 2014

Regulation of the global insurance industry, an emerging challenge in international finance, has two central objectives: strengthening the oversight of insurance companies designated ‘systemically important’; and designing a global capital standard for internationally active insurers. This column argues that it is a Herculean task because the business model of insurance is less globalised than other areas in finance; because global regulators have less experience of insurance than banking where global standards have been pursued for a quarter of a century; and because, as yet, there is limited research-based understanding of the insurance business and its interactions with the financial system and the real economy. But in the aftermath of the global financial crisis and the AIG disaster, regulators are under strong pressure to make progress.

Nicolas Véron, 28 July 2011

Transparency in accounting standards is essential for global financial integration. Yet when the concepts are so complicated and the financial stakes so high, the debate is ripe for capture by special interests. This column suggests ways to stop this, drawing lessons from the debate over International Financial Reporting Standards.

Nicolas Véron, 30 May 2009

Some blame poor accounting standards for the crisis, and many now place accounting reform atop the global agenda. But the International Accounting Standards Board suffers significant institutional weaknesses, this column argues. While the International Financial Reporting Standards are not doomed to failure, there is significant risk of globally fragmented and divergent accounting standards, which would be a loss for everyone.

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