All Articles Finance Modern Money Thought Leadership: Aug. 14, 2012

Thought Leadership: Aug. 14, 2012

2 min read

Modern Money

The U.S. is on the right track with the Financial Accounting Standards Board’s expected-loss model, Tim Bush of Pensions and Investment Research Consultants writes in Financial News: “It is time for the [International Accounting Standards Board] to match the lead taken by the US and deliver accounting rules which help, not hinder, the accurate reflection of the recoverable amount of loans. The IASB has described its introduction of the incurred loss standard as ‘too little, too late.’ It is, indeed, a master of understatement.”

Eurasia Group President Ian Bremmer writes in the Financial Times that allegations over dealings with Iran that hit Standard Chartered this week are an example of a situation that poses a threat for other banks, as well: “Sanctions are a lot less eye-catching than air strikes or a blockade but it is now clearer than ever that they are the primary market risk to watch. Those who do not understand this are liable to take an unsympathetic beating from US officials.”

Author and former software engineer Ellen Ullman explains in The New York Times why she had a laugh at the Securities and Exchange Commission’s consideration of heightened computer-systems testing after the Knight Capital trading glitch. “The best solution would be to bring back the ‘market makers’ of old, the people who stood between the bid and the asking price and were responsible for making the trade work,” she writes. “Yet I cannot imagine they will return. Technology does not run backward.”

Commodity Futures Trading Commission Chairman Gary Gensler writes in The New York Times that the London Interbank Offered Rate, surrounded by allegations of bank manipulation, perhaps should be replaced with benchmark rates “based on real transactions.”

Business Insurance makes the case that property/casualty insurers should not face tougher regulations under the Dodd-Frank Act and that the law has actually spurred changes that benefit the industry: “Establishment of the Federal Insurance Office and the reform of surplus lines marketplace regulation are examples of how the law improved the lot of insurers. Although we wish the FIO had been given greater regulatory authority, the office provides the U.S. insurance industry with an advocate in international regulatory matters.”