MercoPress. South Atlantic News Agency

UNCTAD calls for better accounting and reporting standards

The head of the United Nations Conference on Trade and Development (UNCTAD) called for revising accounting and reporting standards to boost investor confidence amid the current global financial crisis, which he warned is spreading like a “pandemic.”

Problems of "opacity and complexity" are at the heart of the crisis, UNCTAD Secretary-General Supachai Panitchpakdi told a working group on accounting and reporting standards that is currently meeting in Geneva. He added that it may be necessary to introduce amendments to relevant accounting and reporting standards to cope with the crisis, which is "spreading through international financial markets like a pandemic." Such a process "must happen in a fair and transparent way" and should include the participation of developing countries. "The crisis will not only be felt on Wall Street, or even High Street, but – perhaps most painfully – on the muddy, unpaved pathways of the developing world," he stated. He noted that the current crisis originated in United States sub-prime mortgages that were packaged into mortgaged-backed securities and sold to investors around the world. "It was the inscrutable nature of these products that ultimately set off the current wave of financial unrest, with devastating effects." The UN has already revised its projections for world economic growth downward by about 2% for 2009, and "this may still be optimistic," he stated. Mr. Supachai noted that the damage from the current crisis is likely to include liquidity problems for developing country banks, stock-market panics spreading to emerging markets, a global slowdown in demand that will hurt the exports of the world's poorer nations, and possible reductions in aid to poor countries as donor nations give priority to bail-out packages for their own economies. But even amid the crisis, it is crucial to continue efforts to improve well-being and secure stable economic progress in the developing world, he told the group. "We have to work together to ensure that we get back on track to achieve the Millennium Development Goals" he stressed, referring to the global anti-poverty targets world leaders have pledged to achieve by 2015.