A roundup of issues International Treasurer is investigating.
The International Accounting Standards Board said Monday that it would no longer view convergence with US GAAP accounting standards as “an objective in itself”, according to the Financial Times. Political concerns and worries in the US over potential loss of sovereignty have bedeviled the single-standard convergence project, which was slated to be completed next year.
While it is as yet unclear what this means for specific projects, it could have consequences for impairment, hedge accounting and other issues of crucial importance to treasury that have been subject to harmonization efforts.
The annual Securities Lending and Repo conference that wrapped up last week in San Diego reminded attendees of the credit and duration risk involved in securities lending. In fact, speakers said more money was lost in securities lending during the financial crisis than was lost by the more visible money fund industry.
More disclosure is the broad prescription for helping treasury quantify and manage this risk. Other ideas discussed at the conference included using a central counterparty for securities lending to reduce credit risk and using third-party collateral managers with investment management expertise. Indeed, one of the broad shifts in securities lending is the move toward viewing it as an investment management issue, and not a purely operational one.