Banks urged accounting chiefs to rush through new rules on valuing illiquid assets yesterday, calling it a key measure in stabilising financial markets.

Bankers said that the new rules, coupled with increased liquidity announced last week by the Bank of England and the introduction of the long-awaited bailout in the United States, could mean a turning point for the sector.

“At the moment we're feeling more comfortable,” one bank source said.

The International Accounting Standards Board (IASB) promised on Friday to discuss changes to the treatment of financial instruments at its next board meeting from October 13 to 17.

However, banks have called for talks to be speeded up to avoid further instability. Angela Knight, the chief executive of the British Bankers' Association (BBA), said: “There's a view that [the IASB] are moving much slower than their counterparts in the US. They need to get on with making practical changes.”

The BBA wrote to the IASB twice last week, asking for urgent changes to accounting rules.

European leaders also heaped pressure on the IASB to work more quickly on its response to the credit crunch. In a statement issued after a financial summit hosted by President Sarkozy, of France, in Paris on Saturday, the leaders said: “We will ensure that European financial institutions are not disadvantaged vis-à-vis their international competitors in terms of accounting rules and of their interpretation ... This issue must be resolved by the end of the month.”

Last Friday the IASB responded to calls for clarification on the valuation of financial instruments. At present, banks must value them at the price they obtain in the market. The fact that markets for some assets have dried up has led to huge writedowns in the value of the instruments, and multibillion-dollar losses at banks worldwide. Instead, banks would prefer to value the assets at the price they would achieve on maturity.

This week the US Securities and Exchange Commission and the US Financial Accounting Standards Board (FASB) published fresh guidance on asset valuation, leading to accusations that America had relaxed its valuation rules, leaving the rest of the world at a disadvantage.

The IASB insisted that the FASB's guidance remained in line with existing international rules, but it promised to look at introducing the American practice in extreme circumstances of allowing companies to move assets from their trading or held-for-sale portfolios, where they must be marked to market, to their treasury or held for investment portfolios, where they can be kept to maturity.

British banks with large US operations also expect to benefit from the $700billion bailout fund introduced by Henry Paulson, the US Treasury Secretary. The House of Representatives signed off the emergency rescue of Wall Street on Friday night after two weeks of political to-ing and fro-ing. Banks will be able to sell illiquid assets to the fund in order to raise liquidity.

The fund is expected to open in a month to six weeks' time.

Tim Stocks, partner and head of equity capital markets at the European law firm Taylor Wessing, said that the US bailout could have unanticipated consequences. Speaking to The Times, Mr Stocks said that the US Treasury could become a global regulator, grabbing influence over the oversight of financial institutions outside America. “The quid pro quo of a UK bank selling its distressed assets to the bailout fund could be that the US demands a regulatory position on that bank, especially if it has taken a stake in it.”

Banks have praised the Bank of England's actions last week, which they believe may be enough to re-start interbank lending. The central bank promised an extra £40billion in liquidity every week until funding improved and agreed to take a wider range of collateral against its loans.

They believe that this could be enough to ease liquidity problems. “You'd never want to rule out more radical options, but this should go a considerable distance to addressing the issue,” a banker said.

The banks were pleased with Gordon Brown's comments on Saturday night. The Prime Minister said that “no sound, solvent bank should be allowed to fail for lack of liquidity”. The banks understood that this meant that the Government would ensure that sufficient funding would be available through the Bank of England to get them through the credit crisis. “He's given us an implicit promise, without having to guarantee anything,” a banker said.

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