Clarity in accounting and reporting standards needed to cope with mounting financial crisis, UNCTAD Chief says
5 Nov 2008
Says efforts to revise international standards should include participation of developing countries; panellists describe national policies, programmes
Geneva - Transparent financial and accounting rules are necessary to restore investor confidence around the world as the economic crisis intensifies and spreads, UNCTAD´s Secretary-General told a working group on accounting and reporting standards this afternoon.
Problems of "opacity and complexity" are at the heart of the crisis, Secretary-General Supachai Panitchpakdi said. It may be necessary to introduce amendments to relevant accounting and reporting standards, he told the meeting, and if such a process is undertaken "it must happen in a fair and transparent way" and should include participation by representatives of developing countries. "The crisis will not only be felt on Wall Street, or even High Street, but -- perhaps most painfully -- on the muddy, unpaved pathways of the developing world," he said.
Mr. Supachai spoke at a high-level panel discussion of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). The working group, now in its 25th year, began its session Tuesday and will conclude on Thursday.
"The current crisis originated in United States sub-prime mortgages that were packaged into mortgaged-backed securities and sold to investors around the world," Mr. Supachai said. "It was the inscrutable nature of these products that ultimately set off the current wave of financial unrest, with devastating effects." At this point, the Secretary-General said, "the crisis is spreading through international financial markets like a pandemic."
Mr. Supachai remarked that among the damage may be liquidity problems for developing country banks; stock-market panics spreading to emerging markets; a global slowdown in demand, which will hurt the exports of the world´s poorer nations, led by declines in prices for commodities; and likely reductions in aid to poor countries, as donor nations give priority to bail-out packages for their own economies. The United Nations has already revised its projections for world economic growth downward to about 2% for 2009, "and this may still be optimistic," he said.
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Source: UNCTAD
Problems of "opacity and complexity" are at the heart of the crisis, Secretary-General Supachai Panitchpakdi said. It may be necessary to introduce amendments to relevant accounting and reporting standards, he told the meeting, and if such a process is undertaken "it must happen in a fair and transparent way" and should include participation by representatives of developing countries. "The crisis will not only be felt on Wall Street, or even High Street, but -- perhaps most painfully -- on the muddy, unpaved pathways of the developing world," he said.
Mr. Supachai spoke at a high-level panel discussion of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). The working group, now in its 25th year, began its session Tuesday and will conclude on Thursday.
"The current crisis originated in United States sub-prime mortgages that were packaged into mortgaged-backed securities and sold to investors around the world," Mr. Supachai said. "It was the inscrutable nature of these products that ultimately set off the current wave of financial unrest, with devastating effects." At this point, the Secretary-General said, "the crisis is spreading through international financial markets like a pandemic."
Mr. Supachai remarked that among the damage may be liquidity problems for developing country banks; stock-market panics spreading to emerging markets; a global slowdown in demand, which will hurt the exports of the world´s poorer nations, led by declines in prices for commodities; and likely reductions in aid to poor countries, as donor nations give priority to bail-out packages for their own economies. The United Nations has already revised its projections for world economic growth downward to about 2% for 2009, "and this may still be optimistic," he said.
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Source: UNCTAD
