Research On The Separation And Coordination Of The Bank Accounting Standards And Regulatory Rules

Commercial banks are characterized by operating currency which means the enterprises are highly leveraged. So the banks are faced up with high risk. Economic globalization has contributed to the financial globalization which makes finance become the core of the modern economy. As commercial banks are an important part of finance, the stability of the commercial bank management is not only related to the interests of the depositors’and investors’ interests, but also related to the safety of the financial system and even the global economy. Therefore, commercial banks have to comply with the requirements of the accounting standards to provide financial information, while abiding by the rules made by regulatory authorities to disclosure information on risk management during the normal operation. In the2008financial crisis, regulatory authorities and investors ascribe the crisis to accounting as it reflects the loss measured by fair value which intensifies the crisis in turn. Later on people come to realize that it is the financial regulation not accounting which should be responsible for the crisis. But the fact has proved the correlation between accounting standards and financial stability. Regulators, investors and other stakeholders hope that standard-making institutions would consider regulatory requirements.As for the crisis, accounting standards should not be accountable for regulatory rules. But the crisis reflects the realistic requirement of coordination between accounting standards and regulatory rules. It is necessary to research the relationship of the bank accounting standards and regulatory rules. Bank accounting standards aim at the specification of recognition, measurement, recording and report during the accounting work. Regulatory rules are the standards made by the regulatory authorities to maintain financial stability of the banking system. The calculation of specific regulatory standards should be based on the accounting information. So the quality of accounting standards is directly related to the effectiveness of regulatory standards. But the different objectives determine the two standards are different in many respects, such as the focuses and the specific provisions. Regulators think that accounting standards be related to the financial stability in the financial crisis. But we should protect the integrity and independence of accounting standards firstly. And then we should correctly handle the relationship between accounting standards and regulatory rules. The bank accounting standards and regulatory rules should separate on some principle provisions which does not mean to cut off the connection of the two standards but to promote their links. In addition, the coordination means the two standards should match well to achieve the common goal which is to allocate resource optimally and promote social public interests. It can be useful to narrow the difference in the specific provisions of the two standards for coordination.The article finally concludes two points. First, the accounting standards are established under the control of accounting theoretical framework. Due to the different objectives, accounting standards and regulatory rules should separate on such principal items as fair value and loan impairment loss provisions in parallel, to both protect the interests of investors, and maintain the interests of depositors. Second, in order to reduce the compliance costs of commercial banks, accounting standards should provide support to perfect the establishment of regulatory rules as far as possible and minimize differences in specific provision to achieve coordination.The paper makes two innovations. First of all, the bank accounting standards and regulatory rules are two interdisciplinary kinds of specifications. Few papers have studied their relationship. In some sense, the paper brings a new viewpoint. Secondly, the paper both studies the separation and coordination of the bank accounting standards and regulatory rules, and considers the two items as a whole. But the article also has some shortcomings. It does not study the difference of accounting standards and regulatory rules on the hedging accounting. It does not cover the comprehensive items which are related to both separation and coordination. The solution to coordinate need be supplemented as the perfect of the theoretical knowledge and practical experience.