EU Commissioner for Internal Market and Services Michel Barnier has today appointed Philippe Maystadt, former President of the European Investment Bank, as Special Adviser. Capitalising on his expertise in the financial sector, Mr Maystadt’s role as Special Adviser will be to reinforce the EU’s contribution to International Financial Reporting Standards (IFRS), and to improve the governance of the institutions developing these standards.
Commissioner Barnier said: “The harmonisation of financial reporting rules at global level is essential to allow our companies to compete abroad, raise capital, and provide accurate financial information to investors. It is also an important element of global prudential rules for banks and insurance companies. The EU has always been a strong advocate of high quality, global accounting standards. Accounting policy choices have an impact on the public interest, and so our choices in this area need to be carefully thought through. To do this, the EU needs a sound framework for the development of high quality standards, and I am confident that Mr Maystadt’s experience in this field will be of great benefit.”
Mr Maystadt’s mission will focus on a review of the governance of EU bodies in the field of financial reporting and accounting (the European Financial Reporting Advisory Group (EFRAG) and the Accounting Regulatory Committee). This review should help strengthen the EU’s contribution to advocating global and high quality accounting standards. Mr Maystadt will also advise the Commission as it endorses new International Financial Reporting Standards. He will recommend improvements to the current system, in particular on how to integrate different views and ensure that the EU speaks with a single voice. He will hold a series of interviews and public consultations before drafting a report. He will present his final recommendations to Commissioner Barnier and Finance Ministers at the ECOFIN Council meeting of November 2013.
Philippe Maystadt served in the Belgian Government as Minister for Economic Affairs, Minister of Finance, and Deputy Prime Minister. He was also President of the European Investment Bank from 2000-2011.
International Financial Reporting Standards (IFRS) are designed as a common accounting global language making company accounts understandable and comparable across international boundaries. The IFRS are developed by the International Accounting Standards Board based in London.
In line with the regulation on the application of international accounting standards1, as of 1 January 2005 the IFRS are applicable for the consolidated accounts of listed companies in the EU. To this end, the regulation established a dedicated endorsement process under the responsibility of the European Commission together with consultative and advisory organisations, namely the European Financial Reporting Advisory Group (EFRAG) – an independent organisation providing expert advice, and the Accounting Regulatory Committee (ARC) composed of representatives from Member States and chaired by the European Commission.
In 2012, EFRAG started a limited governance review. The focus was to assess the effectiveness of the arrangements in securing cooperation between EFRAG and national standard setters in Europe. The discussions have shown an interest in and need for undertaking a more comprehensive review of EFRAG’s governance.
In order to further ensure the application of high quality financial reporting standards in the EU, in addition to the mission to be conducted by Mr Maystadt, the Commission will carry out a review of the regulation on the application of international accounting standards, in order to evaluate the actual effects of 8 years of international accounting standards (IAS/IFRS) in Europe – for instance, have these reached the regulation’s initial objectives of improving the functioning of EU capital market through increased transparency and comparability of financial statements? The evaluation of the IAS Regulation will integrate the recommendations to be provided by Mr Maystadt and complement them by providing factual data about the IFRS experience in Europe so far.