A risk manager at a western insurance company discreetly approached counterparts in Europe and the US earlier this year to discuss how to value collateralised debt obligations and other "toxic securities." What this executive wanted to know was whether there was any way to get industrywide consistency in the valuation approach.

"It seems there is a still considerable variation in how these instruments are treated by some companies," he confessed. "But that creates confusion for investors. They just don't know what to believe."