The Debate on Mark-to-Market Rages On

Regulators are still debating whether or not to alter mark-to-market accounting changes that require financial institutions to discount assets to "fair value,"whatever that means based on short-term movements in asset prices.

This accounting rule is a joke and should be drastically changed. For a financial institution to write off a portion of a loan simply because the interest rate on it is now below "market norms" if it were underwritten today, even if the loan is current and expected to pay off in full, is absurd.

If the rule isn't changed, there may not be a single financial institution that is able to get through the crisis as of December 31, when they will have to take their quarterly mark-downs.