Currently, the cross-country comparison of financial information is difficult, since the set of rules under which such information is compiled varies from country to country. Moreover, the interpretation of such rules is not always uniform. This is cost-inefficient for those companies having to comply with different accounting regulations because they operate in more than one geographical region. Likewise, the lack of comparability may hamper cross-border activity and decision-making by investors. There have been some encouraging developments in this area. First, is the memorandum of understanding between the IASB and the Financial Accounting Standards Board (FASB) formalising a commitment to convergence towards common principle based accounting standards. Admittedly, this will not be an easy task, but it seems vital to move in this direction. Second, the European Union has taken a significant step forward. It has resolutely considered need to promote the comparability of different countries’ financial information as an unavoidable prerequisite for achieving the single financial market. 2  BIS Review 31/2003  Accordingly, a Regulation was approved last year adopting the International Accounting Standards (IAS). Specifically, in 2005 companies listed on regulated financial markets will have to prepare their consolidated financial statements in accordance with these standards. The thrust of this Regulation is to achieve clear pan-European rules for comparable, transparent financial reporting throughout the European Union. Rules which will make companies provide relevant and reliable information for investors and other stakeholders so that they can make meaningful cross-border and cross-sector comparisons. But accounting regulation also poses significant difficulties.
Jaime Caruana: The impact of geopolitical events on the world economy Speech by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of The Basel Committee on Banking Supervision, at the International Securities Market Association Annual General Meeting, Madrid, 27 June 2003. *  *  *  It is a great pleasure for me to participate today in this International Securities Market Association Annual General Meeting. I would like to thank the organisers for their kind invitation to open this meeting and also to welcome you all to Madrid. The matters to be addressed in the Conference are not only highly topical, but are of crucial importance for all of us. Given the prestige of those who will be offering their opinions, I believe it will be a great opportunity to draw conclusions of enormous interest. The broad theme for this conference is the impact of geopolitical events on the world economy. By way of introduction, let me briefly share with you some thoughts on this topic. The world economy has been through a complicated period in recent years. The expected recovery has been slow, hesitant and disappointing. Several factors have come into play in this connection. On one hand, the persistent impact of the bursting of the IT and stock exchange bubbles has had a negative effect on business and consumer confidence as well as on investment.