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The crux of the matter is this Ivan...

67.68.36.149

In Reply to: RE: FASB... posted by Ivan303 on November 06, 2009 at 17:22:52

(quote) "Washington isn't thinking straight," said Josh Rosner, managing director of Graham, Fischer & Co, a New York-based financial analyst who advises regulators and institutional investors. "Financial statements are for the benefit of investors."

Indeed, allowing banks to alter accounting standards when they run into trouble is incentive to take more risk and, in essence, institutionalizes fraud. The regulators would now be under enormous political pressure -- and sometimes under direct orders -- to allow banks to remain in business long after they've become insolvent, in the hopes that things will turn around and they'll grow again.

And rather than stabilize the system, removing accounting independence destabilizes it in the long run, as investors and other banks have little confidence in the veracity of financial statements. (end quote)

I couldn't say it any better.

Follow Ups:

Less strain on the system, Jimbo. Don't ask, don't bail. * - mr grits 17:43:42 11/06/09 (0)
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Share a bowl of grits with someone you love tonight.
IIRC the horse is already out of the barn on this one... - Ivan303 17:40:36 11/06/09 (1)
Seem to recall that FASB, under pressure form congress, already changed the way bank valued their assets.

Remember the controversy a year and a half ago on "mark-to-market" vs. "hold-to-maturity" accounting?

I really don't care what formula they use to value bank assets, they can do whatever the decide, but they must not be allowed to change the method just because of changes in market conditions.

Boats and Fish!
- Uh-huh, the fair value bullshit. - Jim Pearce 17:58:05 11/06/09 (0)
  If it makes you feel any better, the French want to fiddle their books too.

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