One of the most debated issues since the beginning of the financial crisis is the extent to which fair value accounting contributed to the stress faced by financial institutions. Contrary to what many observers believe, the recent accounting debate has focused less on the choice of measurement criteria - amortised cost or fair value - than on how changes in value should be reported in the income statements.
The Bracken column is named after Brendan Bracken, the founding editor of The Banker in 1926 and chairman of the modern-day Financial Times from 1945 to 1958.While the current crisis continues to wreak the worst financial havoc seen since the Second World War, it is at best premature and most certainly hazardous to try to draw any conclusions.