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Basel Committee and IFRS Foundation team up to strengthen standards

Out-Law News | 12 Sep 2017 | 11:07 am |

The Basel Committee on Banking Supervision and the International Financial Reporting Standards (IFRS) Foundation have signed a memorandum of understanding (MoU) aimed at fostering long-term financial stability, enhancing market discipline and developing sharing of information.

The MoU formalises the existing relationship between the two bodies. By signing the agreement they want to focus more on the development of IFRS standards, their interaction with the Basel Committee framework and the way which both are applied by financial institutions globally.

Under the terms of the MoU, members of the Basel Committee's accounting experts group will meet regularly with the IFRS Foundation to discuss strategic and technical matters related to IFRS standards, which are used in financial markets around the world.

The foundation will also provide input on the Basel Committee's work on prudential regulation and capital adequacy, financial stability and transparency and other matters related to IFRS standard-setting. Each body will be able to invite the other to participate as a member or observer on boards, committees and consultative groups.

Michel Prada, chair of the IFRS Foundation trustees, said: "There is a real desire for international organisations to be more joined up when developing standards for global finance.”

The Basel Committee brings together regulators from around 30 countries to coordinate rules for their banks. Its members include the Bank of England, US Federal Reserve, European Central Bank and the China Banking Regulatory Commission. 

The IFRS Foundation is responsible for setting accounting standards which apply in 125 countries worldwide.