! ” or, in the words of charlie munger ( of berkshire hathaway ) : “ double entry bookkeeping was a hell of an invention. ” bis central bankers ’ speeches now even more than it did back then, accounting poses a considerable challenge and uses huge resources. the need to provide a true and fair view of ever more complex and sophisticated transactions, to the satisfaction of an ever wider range of stakeholders, has led to rather complex accounting rules nowadays. as sir david tweedie, the former chair of the iasb once said, “ anyone who thinks he understands ias 39, has not read it properly. ” but time will tell if ifrs 9 is capable of doing a better job. the new impairment model, with its paradigm change from allowances based on incurred losses to risk provisions based on expected losses, will have a huge impact on financial reports of banks and their analysis. it can be expected to lead to considerably increased impairments at initial application, and over time to a higher degree of volatility. will ifrs 9 add to the trustworthiness of accounts? the primary aim of ifrs 9 is to establish a significantly improved accounting standard for presenting users of financial statements with information that is relevant, useful, and more comprehensive in assessing the amounts, timing and uncertainty of a firm ’ s cash flows from financial instruments. provisions for bad debts will be larger and maybe more volatile, and adopting the new rules will require a lot of time, effort and money. as of today, i understand, it is unclear if the new accounting rules will strengthen the trustworthiness of accounts because of the complexity of the standard. 3. banking supervision another demanding issue, especially in the context of european integration, and of banking supervision in the banking union, is the variety of legal bases for accounting rules. on the one hand, certain jurisdictions oblige preparers to base their financial statements entirely on ifrs. on the other hand, several member states still rely on their national gaaps, at least for financial statements on solo level. nowadays we find advocates of both approaches. the ones argue that uniform accounting rules are key in an economic union. the others favor the retention of national gaaps which, compared to ifrs, in several ways incorporate a greater degree of prudence. in the context of european supervision, we are currently seeing efforts to overcome this diversity in accounting rules for the purpose of developing a set of key risk indicators for crosssectoral and cross - country

europe ) a year of public riots against the government in the austrian empire. the purpose of the publication was to reassure the public that the paper money was covered by adequate silver holdings. after some years of prosperity the first significant financial crisis then also triggered the publication of the central bank ’ s balance sheets from 1863 onwards. the legal necessity to publish weekly balance sheets in order to prove the coverage of the national currency by adequate assets like gold holdings and foreign currency holdings of the austrian central bank continued until 1999, when we joined the eurosystem. from that point on the ecb continued with this task for all national central banks of the eurosystem by its consolidated weekly financial statement until today. nowadays, the tasks of a central bank in the framework of the european economic and monetary union are well defined. they include both the general aim of price and financial stability, and the development, the implementation and the monitoring of compliance with, new regulations. to secure the objective of price stability, the independence of the central bank, especially with regard to monetary and macroprudential policy, is a major prerequisite. it has been recognized that the “ leaning - against - the - wind ” function requires a central bank that is not bis central bankers ’ speeches subject to the pressures of day - to - day politics. for the government and / or parliament to cede this power to the central bank, they need to have the assurance of extensive central bank accountability and transparency ; always tempered, of course, by the amount of confidentiality necessary in order to remain effective, and indeed independent, for example with regard to the voting behaviour of individual monetary policy committee members. a central bank ’ s monetary policy decisions are discussed in the mass media and the general public, and not only the decisions themselves but also their financial results. financial results have become more important – and more difficult to earn – in a “ new normal ” environment of ultra low interest rates and rising costs stemming from increasing tasks of central banks, and also in the context of issues like income and loss sharing which are typical for currency systems consisting of many countries, like the eurosystem. central banks ’ capital adequacy and the definition of financial buffers are usually caught in a tension between, on the one hand, domestic laws, which vary considerably in their definitions of capital and its components, and, on the other hand, systemic balance sheet growth, which is a necessary consequence of central banks ‘ interventions in the financial and economic crisis. as