The European Union wants more consultations over proposed international accounting standards to ensure they better reflect the needs of the financial industry. It particularly wants changes to two controversial rules for accounting derivative instruments, which industry representatives believe could cause financial instability.

The proposals put forward by the International Accounting Standards Board (IASB), an independent London-based institution, will replace national rules across the EU from 2005 and will apply to all listed companies. The aim is to raise the quality of financial reporting and avoid a repetition of recent financial scandals.