The Center for Audit Quality, the CFA Institute, the Council of Institutional Investors and the Consumer Federation of America have written to the Securities and Exchange Commission opposing demands for the SEC to override the Financial Accounting Standards Board's rules on fair value accounting.
The letter to SEC Chairman Christopher Cox came on the heels of a letter from American Bankers Association president and CEO Edward Yingling calling on the SEC to override FASB's recently issued guidance on fair value accounting (see Bankers Ask SEC to Overrule FASB on Fair Value). The ABA and some other groups such as the Financial Services Roundtable have blamed fair value and mark-to-market accounting for exacerbating the credit crisis by forcing banks to sharply lower their valuations of assets such as mortgage-backed securities that they cannot sell. The SEC has begun work on a study of mark-to-market accounting and its impact on the credit crisis, in accordance with a provision of the financial rescue bill, and plans to deliver it by January 2.
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