The Group of 30, a set of economists from around the world, has produced a report recommending a series of reforms to address the financial crisis and provide financial stability.

Among the recommendations, the group, led by former Federal Reserve Chairman Paul Volcker, recommended reforms in fair value accounting.

"Fair value accounting principles and standards should be re-evaluated with a view to developing more realistic guidelines for dealing with less liquid instruments and distressed markets," said the report.

The report recommends the development of principles-based standards that better reflect the business model of financial institutions. The standards should apply "appropriate rigor to valuation and evaluation of intent, and require improved disclosure and transparency."

The group said the standards should also be reviewed by, and coordinated with, regulators to ensure they are consistent with the safe and sound operation of financial institutions.

The report also recommended that accounting principles be made more flexible to allow regulated institutions to maintain adequate credit loss reserves sufficient to cover expected losses across their portfolios over the life of the assets in those portfolios. "There should be full transparency of the manner in which reserves are determined and allocated," said the report.

The group also emphasized that "individual financial institutions must ensure that wholly adequate resources, insulated by fail-safe independent decision-making authority, are at the center of the valuation and price verification process."

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