From the perspective of financial stability considerations, let me briefly recall two specific examples where the current accounting paradigm may be detrimental: First, the extent to which the application of fair value accounting may provide adverse incentives regarding management and investment decisions.
The crisis has largely confirmed the scepticism that fair value is not the most relevant measurement for all asset portfolios at every moment. That would not be the case if all financial markets would obey to the canons of perfect competition, would process information with full efficiency and would not be subject to overshooting, herd behaviour and price misalignments during significant periods of time.