Some rough understanding or recollection.
So U.S. banks objected to writedowns based on mark-to-market accounting, and were accorded some flexibility in that regard by the Financial Accounting Standards Board. Then European banks objected to similar provisions established by the International Accounting Standards Board. The European Union became involved, threatening to cease supporting the International Accounting Standards Board, unless some flexibility of deferral (and hence loan loss recognition) was accorded to European banks. The International Accounting Standards Board made an exception for banks, but the rules still applied to insurance companies. Response of the European Union was to demand that further proposed accounting standards of the International Accounting Standards Committee be vetted and approved by the European Union beforehand, failing which such standards would not necessarily be followed.
So…deferral of losses becoming possible for banks in the United States, plus banks elsewhere that are subject to the pronouncements of the International Accounting Standards Board. Though many jurisdictions also have separate accounting principles for banks?
And then, following the deferrals, some financial institution closures can be deferred no more. Investors losing money and blaming accounting regulators for permitting deferral of losses in the first place.
Some bent circle…