Regardless of any specific decision a firm may decide to make, I strongly support more transparency in financing and payouts, including share repurchase programs. In my view, public policy should aim to eliminate distorting incentives and to encourage instead the role of market discipline. Transparency is a necessary ingredient for market discipline to be effective. 3. Accounting  Accounting issues have gotten a lot of attention this past year. It may be helpful to distinguish between the business of accounting and the rules of accounting. I would first like to discuss the business of accounting. The accounting business has gone through a dynamic period of change over the past several years. A number of this country's accounting firms were considering or had already begun the separation of their consulting business from their more traditional accounting and auditing business well before this past year's turmoil. In this process, accounting firms face a difficult challenge. Once a firm has done a thorough job in its accounting and auditing business, it is well positioned to apply its firm-specific expertise to a consulting problem. However, accounting firms are no longer allowed to provide accounting and consulting services to the same organization. Thus, the challenge for accounting firms is how to develop a business model that will allow them to maintain some of their natural economies of scope and at the same time avoid the conflicts of interest proscribed by law. On a broader level, it seems to me that the accounting industry also faces important personnel issues.

Már Guðmundsson: Currency and exchange rate regime options Introduction by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, to a report issued by the Central Bank of Iceland on Iceland’s currency and exchange rate policy options, Reykjavík, 7 September 2012. * 1.1  *  *  Introduction  In the near future, Icelanders must make important decisions concerning the framework for the currency and monetary policy, the structure of the financial system, and the degree of integration with the world economy. These decisions must be taken in view of what can be learnt from the financial crisis and from previous monetary policy implementation in Iceland. Iceland has applied for membership of the European Union (EU) and, if membership materialises, it will define a clear path for most of these issues. If Iceland does not join the EU, the choices will be different. In both instances, Iceland must lift the capital controls that are currently in place. According to EU rules, this must be accomplished before accession. The experience of recent decades shows, however, that completely free movement of capital comes with significant risk. To reduce that risk, it is necessary to develop a regulatory framework that prepares the Icelandic financial system for the volatility that can accompany free movement of capital. That regulatory framework may entail some restrictions on Iceland’s financial integration with other countries, particularly as regards domestic financial institutions’ freedom to conduct international business. The scope of such restrictions will depend, however, on which currency option Iceland chooses.