More concretely, the group makes these recommendations:
• "Fair value accounting principles and standards should be reevaluated with a view to developing more realistic guidelines for dealing with less liquid instruments and distressed markets."
•Principles-based standards that apply more closely to the business models of regulated banks should be developed. The standards, which should encourage more transparency than current accounting rules do, should be reviewed by and coordinated with bank regulators.
•Accounting principles should be made "more flexible" to enable regulated banks to hold on to credit reserves sufficient to cover expected losses "across their portfolios over the life of assets in those portfolios."
Reader CommentsDisplaying 3 of 8
THOMAS MCCARTHY
Feb 5, 2009 4:17 PM ET
MARK-to-MARKET
MARK-to-MARKET ACCOUNTING HAS BEEN THE STANDARD FOR OVER 40 YEARS. THE PEOPLE WHO WANT TO CHANGE THE CURRENT SYSTEM … more
Ralph Adamo
Jan 20, 2009 3:52 PM ET
Volker is shilling for bankers' poor policies
Volker says the banks need more "flexibility" with the accounting, but he really means that he wants banks to be able … more
Roland Cycan
Jan 20, 2009 10:12 AM ET
Problems
The problems are not caused by fair value accounting. Instead they are caused by the actions people take as a result … more
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