reform of accounting standards
The attached memo has been written in the context of the 2007 financial crisis that has not yet ended. It criticizes the Fair Value accounting standard as a criminal approach that allowed to inflate balance sheets to feed the intermediation of brokers of financial papers and all the financial community with the silent complicity of those, including governments who wanted to issue debts to postpone the required balancing of budgets. The crash with tendencies to deflation was the result of this standard when the cash flows and money rotation (needed for money markets) did not justify the posted values in the balance sheets (subprime…). The proposition is to go back to historical cost accounting with estimates by categories of instruments (depending on warrantees, issuers and duration) to be added and computed as potential adjustments to the equity (comprehensive income) but not as a mean of proof for the judges. More details were given in the book and in various speeches given in Washington in 2011 and 2012 at the NYSE. Contents of these public speeches are available on demand.