Professor Eamonn Walsh:

Thank you Senator. International accounting standards have been around for a very long time. They started in the 1970s. A big change occurred in 2005 when the European Union introduced a requirement that if you issue equity to the public you are a listed enterprise and as such you are required to prepare your financial statements in accordance with international financial reporting standards or IFRS. I have a copy here with me and as you can see it is a thick volume of accounting standards. There is one standard within this called international accounting standard No. 39. This IAS No. 39 deals with financial instruments. The principal assets and the principal liabilities a bank is likely to have are its financial instruments. When one speaks about accounting for banks the principal guidance is IAS No. 39. These rules apply to all enterprises. A retailer applies the same rules as a bank or an insurance company. These rules do not have a specific standard which deals with banks, they have a general standard that deals with financial instruments.