BIS Review 39/2004  1  It is something of a paradox that the decline of the dollar has been concentrated against the currences of the least dynamic economies whose current accounts are relatively balanced, while it has held very stable against the currencies of the highest-growth countries which account for most of the US trade deficit. In any event, the contribution exchange-rate movements may be expected to make in correcting global external imbalances is limited; what are needed are economic policy adjustments by the main countries. Not only was no headway made in 2003 in this area, but economic policies remained oriented, in certain cases, in the opposite direction to what was needed to reduce the imbalances, especially as regards the US budget deficit. As mentioned, the international economic outlook has improved appreciably in 2003 and early 2004. In turn, the recovery will foreseeably take hold in those countries most ahead in the cycle, while those most behind are expected gradually to join the upturn. Nonetheless, certain risks remain and should be borne in mind when assessing the future course of the recovery. An initial risk is that the persistence of current-account imbalances may exacerbate volatility on international foreign exchange and financial markets. Achieving a distribution of world growth more in line with more balanced current-account positions without jeopardising the recovery is, therefore, one of the main challenges facing the world economy.
Moreover, the new accounting rules will alter the role traditionally played by the managers of the institutions and their auditors; the proposed framework is more open and gives them a greater degree of responsibility in relation to the information supplied to the market. The aims of the IAS relate, firstly, to the need for a single financial market within the EU and, secondly, to convergence between these rules and Anglo-American standards in the medium term, such convergence being an element that will strengthen the integration of the international financial system. The Banco de España certainly acknowledges the benefits arising from the objectives of the IAS; but it also detects a need, owing to the complexity of the process and calendar problems, to make the transition simpler and to give it a greater degree of certainty. Also, the Banco de España considers that, from a supervisory standpoint, accounting is an essential element of credit institutions’ regulatory  BIS Review 39/2004  9  and prudential framework. That is to say, accounting standards aiming to promote transparency and comparability among institutions must be compatible with good banking practice in relation to risk management. As a result, the Banco de España, in accordance with its regulatory powers, and taking as its starting point the positive experience of the Spanish supervisory model, based on prudent accounting standards, is drawing up a new accounting/prudential circular.