German and French finance ministers are calling for looser accounting rules that would allow European banks to follow American rivals and avoid reporting heavy losses on troubled assets they cannot sell, AP reported. Germany's Peer Steinbrueck and France's Christine Lagarde wrote to the European Commission on Monday, calling for urgent action from the independent agency that sets accounting standards in Europe. The International Accountancy Standards Board is warning against rash moves and asl for more time to look at changing mark-to-market rules on how companies price assets such as securities based on subprime housing loans that now find few buyers. Steinbrueck and Lagarde are impatient, saying «we expect the change of the standards to be in force in time for the 2009 accounts» and calling for EU regulators to draft rules if the IASB won't move. The U.S.-based Financial Accounting Standards bowed April to a request from U.S. Congress and set new guidelines that allow companies to price investments at the amount they would get in an «orderly» sale instead of writing down impaired assets at current market rates. Steinbrueck also told reporters that he was seeking changes to capital requirement rules that force banks to set aside more capital to cover higher risks. He said EU regulators should look at «procyclical effects» from current international rules where banks with mounting losses must put aside more capital when their debt rating is downgraded. Lending between banks froze last September over worries that some could not repay debt and cope with massive writedowns from securities that have plunged in value. The European Central Bank estimates that euro-zone banks could lose $649 billion from losses from 2007 to 2010.
