Congress Urged to Scrap Market Value Accounting

Credit Union Journal, The, September, 2008 by Analysis Ed Roberts

As part of the bailout of the mortgage markets, the bankers are lobbying Congress to halt by the end of the month requirements that financial institutions mark the value of their holdings at the fair market value.

In a continuation of a two-decade debate, many in the financial markets blame the so-called fair value accounting rules for much of the balance sheet problems that have piled up over the last year.

Under fair value, or mark-to-market, accounting, banks, credit unions and other entities must report the changes in values for all of their holdings for each reporting period, quarterly for most, monthly for others. Entities may report their holdings at book value but only they intend to hold them to maturity and not sell them before.

But the...

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