The European Union’s Financial Services Action Plan (FSAP) has profound implications for treasurers. The creation of a single capital market in Europe is now seen as a key test for Europe’s ability to gain full advantage from the advent of the single currency. If it succeeds, it will mean a deeper and more liquid market to borrow from and in which to invest – especially pension assets. However, the standard accounting principles required by a single capital market, and the UK’s domestic legislation on the minimum funding requirement (MFR) for pension funds, may have serious consequences for corporate pension fund investment, and even for the UK’s euro debate. (See Son of MFR: FRS 17 – Mother of All Distortions or New Reality? by Graham Bishop, Schroder Salomon Smith Barney.)
