Letter from the European Banking Federation to the European Commission

Dear Commissioner Bolkestein

IAS 39 - financial instruments

Further to the 9 June meeting of the "European Consultative Group on Accounting Issues Affecting Financial Institutions", the European Banking Federation thought that it would be valuable to document the reasons why we believe that further progress is needed on IAS 39 before the European Union proceeds to endorsement.

At the outset, we should underline our commitment to the application of IAS to listed companies in Europe as envisaged by the EU Financial Services Action Plan. Banks and their customers have a great deal to gain from the strengthening of the European capital markets that will result from improved and harmonised accounting standards. This, however, will only be achieved if Europe ensures that the standards developed by the IASB are suited to European market conditions and enable the financial statements to reflect the dynamics of business strategy and the economics of transactions undertaken. IAS should ensure that financial statements presented according to its standards provide a management view of the performance of a company when measured against its business objectives.

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