The passage of the financial rescue plan by Congress last week depended in part on the insertion of a provision on reevaluating the fair value accounting standards, which could come back to bite the same lobbyists who urged its inclusion.
In recent weeks there has been a renewed push to suspend the rules on mark-to-market, or fair value, accounting by groups such as the American Bankers Association and the Financial Services Roundtable. They claim that the fair value standards are causing financial firms to continually lower the value of assets such as mortgage-backed securities for which there is no market, driving them down further and further.
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