By Huw Jones
TEL AVIV, June 9 (Reuters) - European Union market regulators have backed the independence of the International Accounting Standards Board, whose top officials face a grilling from the bloc's finance ministers on Tuesday.
The IASB, which sets accounting rules used in over 100 countries, including the 27-nation EU, has come under heavy pressure during the credit crunch to relax a rule that forces banks to value assets at depressed prices, sparking huge writedowns that have unnerved investors.
The G20 meeting of leading industrialised and emerging market countries agreed in April that accounting rules should be amended to avoid amplifying economic cycles.
The board has agreed to revamp its fair value or mark-to-market rule in stages so that key parts come into force by the end of the year in time for compiling 2009 annual company results.
This followed loud calls from finance ministers in April for rapid action to relax the fair value rule after the IASB's U.S. counterpart, the Financial Accounting Standards Board, responded to pressure from Congress by relaxing its fair value standard.
IASB Chairman David Tweedie and Gerrit Zalm, head of the board's trustees, will be quizzed by EU finance ministers meeting in Luxembourg, raising concerns among regulators that the independence of standards setters is being undermined.
"We have to make sure that the regulators act in the general interest in an independent way," said Eddy Wymeersch, who is chairman of the Committee of European Securities Regulators and a senior regulatory official in Belgium.
"We have to make sure international jurisdictions are absolutely independent and that is not an easy task," Wymeersch said on the sidelines of a meeting in Tel Aviv of the International Organisation of Securities Commissions (IOSCO).
"I don't think David Tweedie is being invited for just a friendly cup of coffee. It's unbelievable how politicians have become accounting experts in the last couple of months," added Hans Hoogervorst, head of the Dutch financial markets authority.
The IASB's monitoring board, which includes IOSCO officials, said standard-setters are best able to produce high quality rules if they can exercise independent judgment and due process.
"We reiterate that the IASB's due process and transparency in financial reporting are critical to our continued support as the authorities charged in our jurisdictions with determining accounting standards for use in our capital markets," the monitoring board said just ahead of the EU meeting.
The monitoring board comprises regulators from emerging markets, Japan, the U.S. Securities and Exchange Commission and the Basel Committee of Banking Supervisors.
(Editing by Alastair Macdonald)
(For more from the IOSCO conference in Tel Aviv, click on [nL8366078])