The Financial Account Standards Board win discuss Wednesday whether financial intermediaries should be treated differently from other companies in the hedge accounting project currently in its early stages.

"We have been told that the current rule that a hedge be designated specifically to the individual asset being hedged is extremely difficult," said Halsey Buben, manager of the hedge Accounting project. "Another problem is that Financial Accounting Statement 80 requires that there must be a high correlation between a hedged item and the hedging instrument. This is very difficult for mortgage-backed securities derivatives because each one behaves so differently."

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