Fair value change not on the table
Treasury, SEC unlikely to dismiss mark to market principle
The United States Treasury and the Securities and Exchange Commission are not
discussing the future of fair value, the valuation technique at the centre of
billions of dollars of bank asset write-downs, Reuters has reported.
The news counters speculation, and demands, that the US government would
suspend the accounting rule. US stocks gained ground following comments by
Democrat senator Christopher Dodd that the rule could be amended.
Senator Dodd said it might be possible to soften fair value rules – which
call for assets to be valued at daily market prices – for banks with toxic
assets for which markets have failed, without abandoning the underlying
The International Accounting Standards Board has already announced some
easing but has been reluctant to follow up with the kind of far reaching demands
for suspension or reform that were coming from either the US or Europe.