Two of the world's heavyweight financial markets overseers have announced a formal partnership to increase stability and transparency in the industry.
The IFRS Foundation, whose job it is to develop worldwide financial markets standards, and the Basel Committee on Banking Supervision (BCBS), part of the Bank for International Settlements, have signed a memorandum to formalise their cooperation.
The bodies have worked together in the past, as several issues cut across the accounting standards headed by the IFRS and the regulatory standards of the BCBS. But by publicly stating and endorsing this relationship, the pair aim to strengthen their cooperation.
“There is a real desire for international organisations to be more joined up when developing standards for global finance,” said Michel Prada, chair of the IFRS Foundation trustees. “This agreement will help achieve that.”
In the aftermath of the financial crisis, G20 leaders called on “the accounting standard setters to work urgently with supervisors and regulators”. The BCBS has been an observer of the IFRS's monitoring board since the board's creation, regularly interacts with its standard-setting International Accounting Standards Board and provides other ad hoc contributions.
Although the new agreement will not change their relationship, it will mean the two bodies will commit to meeting and discussing their respective policy developments and agree to work together when in the public interest.