For general discussion and debate. Possible talking point: relaxing mark-to-market.
Responding to pressure applied by lawmakers on Capitol Hill, the Financial Accounting Standards Board on Thursday voted unanimously to give auditors more flexibility in valuing illiquid mortgage assets that may have long-term value. The new guidance, which is expected to boost bank operating profits when they report first quarter results later this month, alters so called mark-to-market rules, which require banks and other corporations to assign a value to an asset, such as mortgage securities, credit-card debt or student-loan investments based on the current market price for either the security or a similar asset.
Many point to the installment of mark-to-market rules in 2007 as the beginning of the financial crisis. Yet, eliminating such restrictions has its own problems. Thoughts?
