The Basel Committee on Banking Supervision (BCBS) and the IFRS Foundation have signed a cooperation agreement to expand information sharing and foster long-term financial stability
The agreement, in the form of a Memorandum of Understanding (MoU), strengthens the existing relationship between the BCBS and the IFRS Foundation at the strategic and working level, focusing on the development of International Financial Reporting Standards (IFRS), the interaction between IFRSs and the BCBS framework, and the manner in which they are applied in practice by financial institutions.
The BCBS is the primary global standard setter for the prudential regulation of banks and provides a forum for regular cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability.
The mission of the IFRS Foundation, through its standard-setting body, the International Accounting Standards Board (IASB), is to develop a global accounting standards that bring transparency, accountability and efficiency to financial markets around the world, fostering trust, growth and long-term financial stability. IFRS Standards are used in over 125 countries although the US continues to use US GAAP.
The BCBS Accounting Experts Group Chair and members of that group intend to meet periodically with representatives of the IFRS Foundation to educate, discuss and share mutual perspectives on strategic and technical matters related to IFRS standards, financial stability, related regulatory matters and their respective influence on financial markets.
The two boards will also share general education and information on their work and the interface between IFRS standards, prudential regulation and capital adequacy; financial stability and transparency; and related regulatory matters and their respective influence on financial markets.
Stefan Ingves, chairman of the Basel Committee, said: ‘I welcome this important initiative which formalises and strengthens the existing relationship between the IFRS Foundation and the Basel Committee. I look forward to continuing to build on our constructive co-operation in the interest of enhancing financial stability.’
The MoU is available to download here
By Sara White