Apr 2, 2009

Kill the messenger

Kill the messenger. This is basicly what i thought when i read the news about relaxing fair value accounting rules by FASB in the US. Not looking at the problem is unlikely to make it goes away. And unlikely to help solving it too.

1 comment:

  1. Hallo Olivier. I cannot say I agree. Forcing banks - or other financial institutions - to mark assets to market at times when the market is in a dramatic under-valuation (compared with longterm valuations) also forces them to provide more equity capital - which in turn prevents them from lending. I think that although mark-to-market is and was a great idea, we have to be sensible enough to deal with the situation as it is, very pragmatically, in order to get it solved. Then, we can look round and see how the rules should be re-adjusted. rgdsAllan Saunderson
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