And are  2  BIS Review 24/2004  the bearers of these risks able to manage potential losses in times of economic stress, so that the financial system is ultimately more stable? The evolution in accounting standards also has many implications for financial institutions and markets.
Does compliance with some of our accounting rules lead to large swings in reported earnings that do not reflect the true economic state of a firm? If we are to use fair-value accounting, how do we ensure that both assets and liabilities are correctly and equally marked to market?