Accountants flustered by Greek inconsistency

Financial Times
September 21, 2011

The Greek financial crisis has caused an outbreak of sheepishness within the accounting profession. The embarrassment stems from the way that some European banks and insurers reported losses of 21 per cent on Greek government bonds, while others slashed their value by 50 per cent or so.

Given the fevered and paranoid state of investor sentiment, the inconsistency may well have exacerbated market jitters. “It makes all of us look a little foolish,” the chief executive of one leading auditor told me this week.

The uneven writedowns hit the headlines late last month when it emerged that Hans Hoogervorst, chairman of the International Accounting Standards Board, felt that some financial institutions should have reported bigger Greek sovereign debt losses in their first-half results.

More