As The Telegraph in particular has reported, there are serious concerns about the IFRS accounting standard applicable to banks. It may enable and encourage banks to report false profits and fake capital. If my specialist colleagues are right, the banks could be in much worse shape than commonly thought.
Steve Baker (Wycombe) (Con): I congratulate the Chancellor on this report , but I believe it takes for granted the adequacy of accounting standards. Will he look again at the incentives and risks inherent in the international financial reporting standard?
Mr Osborne: Yes, I will certainly do that. One of the discussions going on in international circles at the moment is how to make all the various standard-setting bodies more accountable. They are very powerful institutions now and they are not really accountable to national Parliaments or international bodies that represent national Governments. Discussion is going on about how the Financial Stability Board, which is the organisation that brings together different banking areas and different countries to discuss regulation, might be able to make the international accounting standards more accountable.