B of A CEO: Accounting Rules Big Contributor to Crisis

Bank of America CEO Ken Lewis said that a couple of accounting rules continue to be big contributors to the ongoing financial crisis. I couldn't agree more. From the Charlotte Observer:

Mark-to-market accounting rules require banks to value their assets based on a price they could immediately fetch, rather than their long-term value. That's resulted in absurd short-term valuations, Lewis said.

Another problem is capital provisioning policies. “This idea of building reserves in the bad times and reducing reserves in the good times … I don't know how big a squirrel's brain is, but a squirrel knows better than that,” he said.