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Looking Forward In Angst: The Deficit Debate Needs More ‘Mark To Market’ Accountability

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banker

banker

Earlier today…

As veteran critics of the post-crash financial industry well know, one thing that has allowed big banks to maintain their rosy outlook is a rule change from the Federal Accounting Standards Board that allows these entities — still flush with toxic assets — to avoid having to mark their assets “to market.” Instead, banks are allowed to essentially treat these assets as “marked to fantasy,” a hoped-for future value that is unlikely to ever be realized. The banks have fought, and beaten back, any attempt to return to a “mark to market” regime, and it’s easy to see why: Reality comes with a cost. Should they ever have to realize the true value of the assets on their balance sheets, their false façade will fall, and it will be revealed that they are more structurally insolvent than they prefer to let on.

Via:
Looking Forward In Angst: The Deficit Debate Needs More ‘Mark To Market’ Accountability
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Written by eggplant

March 4th, 2013 at 11:32 pm

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