US banks urge US lawmakers to clarify fair value

US banks have pleaded with regulators to immediately clarify fair value
accounting rules, warning failure to do so would negate the government’s efforts
to bolster the financial sector.

In a letter addressed to Treasury Secretary Henry Paulson and copied to
Christopher Cox, US Securities and Exchange Commission chairman; Ben Bernanke,
Federal Reserve chairman; and Timothy Geithner, Federal Reserve Bank of New York
president, the American Bankers Assocuation (ABA) urged SEC to clarify certain
aspects of fair value accounting, which requires assets to be valued at market

ABA, which lobbies on behalf of all US banks and thrifts, said fair value
accounting rules would undo much of the work of Treasury’s capital purchase

‘While the government makes billions of dollars available to increase
capital, other policies simultaneously are needlessly, and wrongly, erasing
billions of dollars in bank capital,’ ABA said in the letter.

Further reading:

Experts back fair value for the US

SEC continues fair value investigation

Related reading

Fiona Westwood of Smith and Williamson.