Financial Regulatory Forum

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Hugo Dixon

LONDON, March 16 (Reuters Breakingviews) – Lehman Brothers’ now notorious “Repo 105″ scam depended on forum shopping. The investment bank was not able to persuade U.S. lawyers that the relevant repurchase agreements constituted real sales.

So it routed them through its UK subsidiary. That meant they came under the English legal system, and law firm Linklaters was able to opine that the transactions counted as sales.

U.S. accounting apparently did the rest, allowing Lehman to shuffle $50 billion dollars of assets off its balance sheet. Regulators in different jurisdictions need to cooperate to close all such gaps they can.

Forum shopping, also known as regulatory arbitrage, is undesirable, but smart bankers are always going to do it.

By Huw Jones

LONDON, Feb 15 (Reuters) – The hunt for a new chairman of the world’s top accounting standard setter is sparking discrete jostling for a job Asian candidates are seen having the edge as economic influence shifts east.

International Accounting Standards Board Chairman David Tweedie stands down in June 2011 after a decade spent transforming an obscure committee into a board whose rules are effectively law in over 120 countries, including the European Union.

Japan, Canada, India, Korea and Brazil are also adopting IASB rules, with China bringing its domestic standards in line too. The United States is left increasingly isolated as it decides how to join the club and when.

By Huw Jones

LONDON, Feb 15 (Reuters) – The world’s leading accounting standards setter bolstered its defences from political pressure on Monday and reinforced its role as an independent guide to investors rather than a tool for policymakers.

The International Accounting Standards Board (IASB) sets accounting principles that are effectively law in over 100 countries but has been criticised for being aloof and slow to respond to policymaker concerns during the financial crisis.

Its rules will form the bedrock for one set of global standards by mid-2011 as called for by the G20 group of leading nations to improve transparency for investors and cut red tape for companies.

By Alison Leung

HONG KONG, Dec 30 (Reuters) – Hong Kong’s pending acceptance of Chinese accounting standards will mark an important advance in Beijing’s drive to globalise its financial sector, but could also challenge international investors with reports prepared by an industry prone to scandal.

A proposed rule change likely to take effect next year would see Hong Kong’s stock exchange let locally-listed Chinese firms report using their home accounting standards, a move designed to lower costs and keep Hong Kong competitive with Shanghai.

But concerns about supervision of Chinese auditors have led to delays, making it unlikely the exchange will meet its Jan 1 target date to implement the change.

    LONDON, Nov 11 (Reuters) – Pricing bank assets may prove less of a rollercoaster ride in future crises after a global standard setter revised a key accounting rule on Thursday after calls from world leaders to curb credit crunch fallout. (more…)

By Huw Jones
LONDON, Nov 5 (Reuters) – A global accounting standard setter published on Thursday a second leg of proposals to replace its fair value rule that was criticised by policymakers for amplifying the credit crunch.

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By Huw Jones
BASEL, Switzerland, Oct 8 (Reuters) – The U.S. Securities and Exchange Commission will review by the end of the autumn its milestones for possible adoption of a global set of accounting rules, its chairman Mary Schapiro said on Thursday.
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By Ian Simpson
GENEVA, Oct 7 (Reuters) – Private bankers face higher costs as a wave of regulation forces them to spend on infrastructure and more staff, executives told the Reuters Wealth Management Summit.

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By Huw Jones
LONDON, Sept 30 (Reuters) – The top accounting rule setter said on Wednesday that U.S. plans to widen the scope of a rule blamed for amplifying the credit crunch was unacceptable, raising doubts over a 2011 deadline for a global set of accounting rules.

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   MONACO, Sept 7 (Reuters) – Eleven of the world’s biggest reinsurers will work to find common positions on tax, solvency, accounting and other rules and avoid being tarred with the same regulatory brush as banks, the group said late on Sunday. (more…)