Change Mark-to-Market Rules Help Banks Hide the Truth

More on mark-to-myth from an op-ed by James Chanos in today’s Wall Street Journal – We Need Honest Accounting

Mark-to-market (MTM) accounting is under fierce attack by bank CEOs and others who are pressing Congress to suspend, if not repeal, the rules they blame for the current financial crisis. Yet their pleas to bubble-wrap financial statements run counter to increased calls for greater financial-market transparency and ongoing efforts to restore investor trust.
. . .
Obfuscating sound accounting rules by gutting MTM rules will only further reduce investors’ trust in the financial statements of all companies, causing private capital — desperately needed in securities markets — to become even scarcer. Worse, obfuscation will further erode confidence in the American economy, with dire consequences for the very financial institutions who are calling for MTM changes. If need be, temporarily relax the arbitrary levels of regulatory capital, rather than compromise the integrity of all financial statements.

My thoughts exactly.

One thought on “Change Mark-to-Market Rules Help Banks Hide the Truth”

  1. The Mark-to-Myth battle continues

    It appears that the issue of mark-to-market (fair-market) accounting being replaced by mark-to-myth accounting is still very much alive. As you may recall, earlier this year (under pressure), the Financial Accounting Standards Board (FASB) changed the …

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