Mr. Cormac Butler:

They claimed that it was by law, but there is no law. The law says that the accountants may produce accounting standards provided they help people to comply with company law. The accounting firms appear to have said that in America, where there is a different version of company law, they are allowed to hide losses and that "we would like to have that over here, so we will include that paragraph and when the accounting standard is approved we will start to hide losses." The problem is that they put it into the guidance notes only. The main law, which is the IAS 39 standard that is approved, did not allow the banks to hide losses. It gets a little bit technical.