...Financial Crisis Advisory Group July 28, 2009 To the Members of the International Accounting Standards Board and the US Financial Accounting Standards Board: On behalf of the members of the Financial Crisis Advisory Group (FCAG), we are pleased to present our report to the Boards about the standard-setting implications of the global financial crisis. We believe that confidence in the transparency and integrity of financial reporting is critically important to global financial stability and sound economic growth. We hope that our conclusions and recommendations will be helpful to the Boards as they work together to simplify and improve accounting standards on financial instruments and other key areas highlighted by the crisis. The FCAG will be meeting in December to review the progress that has been made. In the meantime, we are available to assist the Boards in their efforts. Sincerely, Harvey J. Goldschmid Co-chair Hans Hoogervorst Co-chair cc: Gerrit Zalm, Chairman of the Board of Trustees, International Accounting Standards Committee Foundation John J. Brennan, Chairman of the Board of Trustees, Financial Accounting Foundation Report of the Financial Crisis Advisory Group – July 28, 2009 Table of Contents Page I. INTRODUCTION _________________________________________________________________________ 1 II. PRINCIPLE 1: Effective Financial Reporting____________________________________________________ 3 Intersection of Prudential Regulation...
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...which incorporated detailed and rich discussions on the ideas generated by the papers. In this effort, the central intention of the Task Force was to try to identify promising or successful experiences in country efforts to move towards the various Goals, and to gain understanding of the factors contributing to this progress. The focus of the papers is therefore on the national and local level; on country-led (rather than UN) efforts; and on a range of immediate and underlying factors that appear to be important or essential in enabling progress under differing conditions and country circumstances. The papers do not present or represent formal, official UN policy positions. Rather, they reflect the collective analytical efforts of the MDG Task Force, as endorsed by the UN Development Group, in an effort to bring ideas and suggestions, based on country and field experience, to the attention of UN Member States and development practioners everywhere. We hope that, as such, the papers provide a valuable contribution to the continuing discussions on policies, programmes, advocacy, financing and other conditions which are needed to achieve broad-based and sustained progress towards development goals, particularly for...
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...world economists pay much attention to the European economic development. Due to the fact that countries have various financial policies and complex national conditions, it seems that Eurozone faced more difficult challenges when the financial crisis happened (Auditor General of the Swedish National Audit Office, 2010). For instance, the subprime crisis in 2008 shocked the whole European economy. Then in 2009, the sovereign debt crisis happened in Greece made the entire world economic unstable. The Eurozone keeps low rate of inflation for a long time and single currency that can protect their members away from the external economy attack (Otmar, 2008), especially for the weak member countries. Using the Euro may reduce the risks in the cost of borrowing in the financial market, which emerge encourage potential investors to invest capital in their countries (P. Jacques. 2006). However, according to the classical theory of Keynes, financial policy is a decisive tool for stabilizing the economy. It means that government should increase expenditure and reduce the tax to stabilize the economy in recession (ibid). However, it would be unworkable in the Eurozone. If European countries merely carried out the single currency and ignored the unbalanced economic foundation of each country, it may cause conflict between national political institutions and independent financial policy. Despite the fact that since the single currency has been carried out, the Eurozone GDP has increased sharply...
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...Summary Today’s society consists of a crises where there is a need for crisis management, however critics argue there is not enough being done to assist all nations from this organization. There is little attention from the International Monetary Fund (IMF) for developing countries trying to work on their financial situation. The IMF is focusing their attention on developed countries with the expensive plans and rescue operations. There is speculation that short term crisis management has too many negatives including it is too costly, responses are not quick enough decisions that are made are often incorrect, and more. There will be much discussion on the debt crisis and the exchange rate. IMF The International Monetary Fund The is an association of 187 countries, employed to foster global monetary collaboration, secure financial stability, facilitate global trade, encourage high percentages of employment, reach for economic growth between many different nations, and reduce poverty around the world, without discriminating against different countries. Many critics believe this establishment to be positive for the many responsibilities they take care of. For example the International Monetary Fund will provide assistance in areas including giving training and technology to developing countries to help with their own economic structure so they can work on their own eventually. IMF works closely with many different nations and the members included and are involved in the media...
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...have emerged from your analysis and separate those that will require behavioral change and also list the changes that will bring about those behavioral changes * Behavioral changes are the most difficult to achieve and this difficulty is underestimated Analysis of Starting Conditions * First of the three categories of starting conditions is the urgency for action, organizational readiness, and personal readiness * Urgency for Action: The Crisis Curve * Pressure to implement the changed that you have in mind * The crisis curve identifies three categories of urgency ranging from the relatively low pressure of anticipatory change to the absolutely immediate demands of crisis change * To implement strategic changes of the future, would be an act of anticipatory change * Management reacting to current environmental pressures of deteriorating performance is reactive change * When the business falls down this slop and progresses to the point of improbable recovery, this is an act of crisis change * Understanding...
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...| The accession of Croatia to EU: A timely change for EU? | | | | | | Introduction This paper discusses the path of Croatia to the European Union. It explains all the different challenges Croatia faced in order to be able to comply with the EU standards and obligations. There is the Fundamental Rights chapter that presents the arguments that showing the great effort that Croatia has put in adopting new frameworks in all areas of the chapter. After, there are the benefits and risks that Croatia could face after EU accession. Some concerns about the economic crisis are mentioned from the public opinion and other EU members’ point of view. Finally there is a conclusion explaining what Croatia could benefit from or be deprived of by joining the EU, followed by a last explanation if there are still challenges in the political criteria. The path to the European Union The war in Croatia cost them loss of a whole decade in the path to European Union. In particular the war was detrimental for the economy. Was Croatia lagging behind to meet EU standards back then? Was there enough stability or any limitations toward accession to EU? The first step towards EU was on 29th October 2001 when Croatia signed the Stabilisation and Association Agreement in Luxembourg, becoming a potential candidate for joining the EU. All candidates which aim in joining the EU have to adopt the EU’s legal patrimony known as acquis which contains 31 chapters. The process of integration...
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...also deeply involved in regional co-operation initiatives. These factors contributed to global disinflation in manufactured goods prices, abundant global liquidity and strong growth in commodity-exporting economies including Australia. (maybe because of 1997-1998 Asian financial crisis) In the coming decade, Asian economies are likely to continue their ascendancy, albeit at a slower pace, which should eventually decouple Asia from the advanced economies. With increasing domestic cost pressures, Asia may also become a new source of global inflation. Asia’s exports of capital to advanced economies may shrink as the region rebalances and outflows should focus more on portfolio investment and foreign direct investment (FDI). In the coming decade, a potential crisis in a major Asian economy such as China could trigger the next global recession. SUMMARY: History: more than 1000 years before the industrial revolution, the combined share of China and India in the world economy was routinely greater than 50% (but whether they will assert influences on the world economy depends on assumption of sustainability) 1993: the East Asian miracle, HPAEs (world bank 1993), no China India 1997-1998 Asian financial crisis (triggered by the withdrawal of foreign capital from the region, however, excessive borrowing, overheating economies and declining investment returns in previous years had already laid the foundations) 1999, 2000: most Asian countries recovered 2008 GFC may accelerate...
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...“There are more than 26 million who are out of work, cannot find full-time work, or have given up looking for work. About four million families have lost their homes to foreclosure and another four and a half million have slipped into the foreclosure process or are seriously behind on their mortgage payments. Nearly 11 trillion in household wealth has vanished, with retirement accounts and life savings swept away. Businesses, large and small, have felt the sting of a deep recession. There is much anger about what has transpired, and justifiably so. Many people who abided by all the rules now find themselves out of work and uncertain about their future prospects.” When reading this information, you may think it may be the status of a certain poor country. The particularly serious numbers show that country is experiencing many problems. I will tell you a secret that you can not have more surprise. The above information is situation of the country that has a most powerful economy all over the world. That is United State of America. The year 2008 marked the economic crisis which caused the USA severe damages. Many of the US financial institutions have suffered heavy losses due to the effect of this crisis. In addition, the crisis is increasingly spreading to the economies of some countries in Europe and in Japan... As a result, some powerful banks in these countries are also suffering from the impact of the crisis. The consequences of the crisis are not only observed in the dimensions of...
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...attracting foreign direct investment, particularly in export-oriented sectors. A series of shocks over the past decade has hit the economy in the last 10 years, however, including a coup in 2006 and subsequent political unrest, the global financial crisis and...
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...other industrialized areas of the world experienced the deepest and longest lasting economic collapse. This phenomenon was called the Great Depression, which began after the stock market crash of October 1929 and lasted until the late 1930s. More than a century after, the world economy faced its most dangerous crisis for a second time. By the year of 2007, when sky high home prices in the United States went down, spread quickly to the entire country financial sector and then to the financial markets overseas, the called Global crisis of 2008 had born. Anyhow, the economic world has had many other financial crisis of different types at different levels of impact over the world. For this reason, it is really important the study of the main cause of all these financial crisis that bring chaos, create poverty, and widen the gap between rich and poor; the monetary system and the money it produces. In order to make evident the deficiencies of the monetary system and answer the following question: Do we really need money? I proposed three sub question that would clarify and support the main answer. These questions are: In what the monetary system depends on? How a financial crisis is created and how it affects the economy? Has the monetary system created poverty? Will the monetary system balance the difference between poverty and wealth one day? In what the monetary system depends on? Money rules the economy of countries. As we all know, money is not only a medium of exchange, but...
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...International Monetary Fund International Monetary Fund (IMF) is an organization which monitors the currency and free trade, provides financial assistance, and maintains international financial operations. IMF is committed to promote world finance, strengthen financial stability, and enhance the sustainable development of free trade (Hill, 2013). Nowadays, the global financial is in a critical period, and IMF plays an important role for providing members with loans, monitoring and adjusting international cooperation on currency issues, and regulatory system (Rajan, 2008). IMF for economic governance and reform has been making a great progress and improvement since 2010 (Stijn, & Mayhan, 2013). IMF involved in supervision of each member of the financial management and the world economy function scope is quite large. This is because of the function definition is not clear, which resulting the unclearness in the division of labor with other international institutions. So as to some developed countries put pressure on developing countries, the media, as well as the incentives cannot be relatively reasonable standard based on the exercise of power. The functions of the broad and excessive monopoly will eventually bankrupt because of inefficiencies. Therefore, how the function of IMF is its detailed specification of global governance is an important start (IMF, 2013). Firstly, the method of IMF to solve problems is essentially based on the regulatory and assistance...
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...The ECB’s monetary policy in the crisis * In 1763, Amsterdam was the centre of a deep financial crisis. Highly leveraged investors were faced with a situation of falling asset prices. The liquidity crisis became severe and Amsterdam bank houses went bankrupt. * Similarly liquidity was an issue in the modern day financial crisis. Money markets seized up and several market participants found themselves unable to roll-over funding positions. * Finally, at the beginning of 2010 the latest turn: several euro area countries’ debt and deficit levels were found to be unsustainable. * Differently from the crisis in 1763, the determined actions of central banks prevented deleveraging, fire sales and ultimately deflation. * The ECB, and indeed all major central banks, reduced its policy rates to unprecedented lows and implemented various measures to restore monetary policy transmission to support credit flows to the real economy. * Liquidity support gives banks unlimited access to central bank money at a fixed price against adequate collateral for banks to liquefy their assets at times of stress by expanding the set of eligible assets used as collateral. * Also extending the maturity of lending so that the longest maturity of our long-term refinancing operations (LTROs) has been raised from the standard 3 months before the crisis to 6 months after. * The Outright Monetary Transactions (OMTs), eliminate the pricing of un-warranted tail risks in the bond...
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...INDONESIA: The Causes, Effects and Lessons of the 1997 East Asian Financial Crisis by Zara Ahmed Julia Dreier Frank Ro April 9, 2007 FSPP 556: Macroeconomics Professor Kathryn Dominguez [pic] Introduction Following its independence in 1945, the Indonesia economy deteriorated drastically as a result of political instability, a young inexperienced government, and ill-disciplined economic nationalism. However, the New Order administration in the 1960s, brought about a new degree of discipline to economic policy that quickly brought inflation down, managed foreign debt, but more importantly, attracted foreign investment through financial liberalization. As massive inflows of foreign investment poured into the country, problems soon arose with regulation and oversight. These structural weaknesses created instability and ultimately multiplied the effects of the Asian Financial Crisis in 1997. With strong encouragement of the IMF, Indonesia adopted a set of policies to protect currency values and penalize insolvent companies, in order to restore investor and creditor confidence in the country. Despite assistance from the International Monetary Fund, the Crisis devastated the Indonesian economy and brought on massive social unrest. This paper consists of six parts. We intend to analyze pre, during, and post-crisis trends utilizing such macroeconomic models as the Mundell-Fleming model, the IS-LM model, and the open economy model for calculating...
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...competitiveness within the post-crisis economy. Causes, evoiutions and possibie innovative soiutions to fight against the undesirable effects of the economic crisis Laura Mariana CISMAÇ West University Timisoara laura.cismas@feaa.uvt.ro Ruxandra Ioana PITORAC West University Timiçoara ruxandrapitorac@gmail.com Abstract. The main objective of this paper is to highlight the need for promoting a new vision regarding competitiveness mostly in the context of amplifying the effects and the complexity of the nature of crisis manifested now on the international level (economic, environment, demographic, value and moral etc.). The economic thinking pays increased attention to the issues related to economic crisis, as well as the development of theories that give satisfactory answers about the causes and, especially, the solutions to the crisis. Using scientific observation and comparative case study as research methods, this paper aims to make a theoretical critical review of the theories regarding the causes of economic crisis over time and to identify and analyze some anti-crisis policies. Keywords: economic competitiveness. crisis; macroeconomic theories; anti-crisis policies; JEL Classification: E30, GOL REL Classification: 81, 8M. 24 Laura Mariana Cisma§, Ruxandra ioana Pitorac Introduction Theoretical controversy on crises has augmented over the last two decades with a special accent on system and stmcture crises, as well as on the crisis of intemational economic relations...
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...surprisingly however is the limited extent to which the global financial crisis had impacted on Australian productivity and economic growth. The significance of this can be shown through analysing the GDP per capita adjusted for purchasing power parity. Graph 1 [pic] Graph 2 [pic] Graphs 1 and 2 highlight the growth trend in GDP per capital from the years 1998 to 2009. Note that New Zealand’s GDP per capita is overall lower than Australia but this is not the point of interest. What is to be highlighted is that Australia’s trend of growth continues to increase, however New Zealand’s trend declines slightly in the year 2009 which reflects the policy implemented and the time lag it took for the global financial crisis to affect GDP per capita. Graph 3 [pic] To further reinforce Australia’s position is the Canadian trend which shows a reduction of GDP per capita during 2008, and as confidence in the economy picks up, the GDP per capita for 2009 is much more positive. As shown through the graphs, Australia is in a relatively stable position in terms of GDP per capita as compared to other developed nations, with no fluctuations and only a steady increase in growth reflecting the successful macroeconomic policies which promote consumption and consumer confidence in the economy. Although successful policies implemented by the Government and the RBA may have dampened the effects of the global financial crisis and allowed our GDP per capita to stay strong and continually...
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