European banks appear to have won a significant reprieve from the International Accounting Standards Board (IASB) on the controversial new accounting standard known as IAS 39.

At a meeting on Wednesday at the IASB's three-day board meeting in Rome, the board tentatively approved a macro hedging approach, which will permit entities to use fair value hedge accounting for a portfolio hedge of interest rate risk. Although the standard will affect all European-listed corporates when they come into full effect in 2005, the concession will be particularly beneficial to banks who are the main users of macro hedging strategies.