In an interview with the Financial Times, Sir David Tweedie commented that the rules - which allow banks to value assets at their amortised cost rather than current market value - were introduced to avoid lost earnings during periods of market volatility.
According to the newspaper, some â¬113 billion ($144 billion) worth of assets have been reclassified using the rules in the past week alone.
While the rules were introduced in order to protect banks from losses stemming from market volatility, Sir David warned that using amortised cost allows institutions a greater degree of discretion in their valuations.
"I don't see how disguising things is going to actually make confidence higher. That's why fair value is so important: get it up front, show it as it really is and that makes people more confident," he said.
The IASB exists to develop a uniform set of international accounting standards and financial reporting rules.