International Accounting Standards Board Chairman Sir David Tweedie said he nearly resigned before giving in to pressure from European regulators to modify fair value accounting standards to allow banks to reclassify their assets.

The European Union had threatened to carve out an exception to the standards unless the IASB agreed to the changes, and Tweedie feared that the carve-out could derail efforts to converge accounting standards internationally. Amendments to International Accounting Standard 39 last month have allowed financial institutions such as Deutsche Bank, HSBC and the Royal Bank of Scotland to significantly boost their stated pre-tax profits by avoiding the need to use mark-to-market accounting for some of their financial derivatives.

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