A frustrated accounting standard setter told an audience full of accountants that someone needs to pry the gorilla of banking regulators off his back.

Robert Herz, chairman of the Financial Accounting Standards Board, made perhaps his most detailed and impassioned plea yet that the regulation of financial institutions needs to be “decoupled” from U.S. Generally Accepted Accounting Principles that are meant to serve investors’ needs. He all but pleaded with those attending the American Institute of Certified Public Accountants conference on current financial reporting issues to help him spread the religion that investors need different information than banking regulators do.

Accounting standards have been under threat throughout the economic crisis as banks and their regulators have pushed FASB and even Congress for changes that would minimize the reporting of losses arising from failed loans. “It should be made clear that the results of GAAP financial statements do not dictate regulatory requirements,” Herz said. “Rather, they are but one source of data to inform the prudential judgments made by regulators.”

He didn’t directly call on Congress to wrestle the beast, but he noted that it was an act of Congress in the wake of the savings and loan crisis of the 1980s that required bank regulators to begin their determination of capital requirements with GAAP numbers. He bristled at suggestions from Congress that accounting principles shouldn’t be so protected that their impact on public policy should be ignored. “Accounting standards also should not be so malleable that they fail to meet their objective of helping to properly inform investors and markets or that they should be purposefully designed to try to dampen business, market, and economic cycles,” he said.

Drawing greater distinction between investors’ needs and safety-and-soundness needs “could enhance the ability of both FASB and the regulators to fulfill our critical mandates,” Herz said. “We can continue to work with independence and an unwavering dedication to market transparency; at the same time the bank regulators can utilize their authority to take whatever actions are required to keep the financial system stable and healthy.

More recently, FASB has drawn bankers’ ire for suggesting banks should use more fair value to report the value of financial instruments carried on the balance sheet, despite banks’ demands for relief from fair-value requirements. In FASB’s defense, Herz cited a 1991 report from the General Accountability Office that said “the key to successful bank regulation is knowing what banks are really worth.”