Will the SEC Suspend Mark-To-Market?

Discussion in 'Economics' started by Cdntrader, Oct 3, 2008.

Will the SEC SUspend Mark-To-Market? If so when?

  1. No

    11 vote(s)
    39.3%
  2. Yes, next week.

    9 vote(s)
    32.1%
  3. Yes, by next month.

    7 vote(s)
    25.0%
  4. Yes, by next year.

    1 vote(s)
    3.6%
  1. Will the SEC Suspend Mark-To-Market? If so when?
     
  2. SEC Chairman, Big Four Accounting Executives Meet Friday



    By Judith Burns, Of DOW JONES NEWSWIRES

    WASHINGTON -(Dow Jones)- Securities and Exchange Commission Chairman Christopher Cox is meeting with executives from Big Four accounting firms Friday.

    The meeting was scheduled weeks ago, before the SEC came under pressure from some U.S. lawmakers to suspend mark-to-market accounting rules. The issue wasn't on the agenda originally, but is expected to be a focus of discussion at Friday's meeting.

    SEC spokesman John Nester declined to comment.

    The meeting comes just days after a bipartisan group of U.S. House members called for the SEC to shore up the nation's banking system by immediately suspending use of mark-to-market accounting.

    The SEC oversees U.S. accounting rules, which are set by the nonprofit Connecticut-based Financial Accounting Standards Board. The SEC and FASB issued joint guidance Tuesday to clarify use of mark-to-market accounting rules, a move that fell short of the suspension sought by scores of House members of both parties.

    Fair value accounting, also know as mark-to-market accounting, requires valuing assets and liabilities at current market prices. Critics say the method isn't working well in turbulent markets and is forcing lenders to write down the value of mortgage-related assets far below their true worth.

    Big Four accounting firms oppose efforts to suspend mark-to-market accounting, saying that would leave investors in the dark and undermine the credibility of U.S. banks, making matters worse, not better. The Financial Accounting Foundation, which oversees the FASB, also weighed in, warning lawmakers that " political interference" in accounting rules could c
     
  3. "Tomorrow French president Nicholas Sarkozy will propose suspending the use of mark to market in Europe at a summit of European leaders. The US rescue plan going through the House of Representatives also includes a provision reaffirming the right of Securities and Exchange Commission to dump mark to market."


    http://www.vnunet.com/accountancyage/news/2227513/iasb-makes-fresh-commitment
     
  4. Sarkozy Says EU Will Support Banks, Seek Hedge Fund Regulations

    By Francois de Beaupuy

    Oct. 4 (Bloomberg) -- Leaders of the European Union's four largest economies agreed to support their own nation's banks ``when faced with a crisis,'' while coordinating with their counterparts, seeking a consensus approach to the credit crunch.

    The officials, meeting in Paris at a summit today convened by French President Nicolas Sarkozy, also called for regulations on hedge funds, credit-rating firms and investment banks.

    ``We've made a solemn commitment to support banks and financial institutions faced with the crisis,'' Sarkozy said after the meeting with leaders from Britain, Italy and Germany, in addition to European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker.

    They called for looser accounting rules regarding the valuation of assets and advocated a revision in compensation practices of traders and financial executives to discourage ``excessive risk taking.''
     
  5. They called for looser accounting rules regarding the valuation of assets and advocated a revision in compensation practices of traders and financial executives to discourage ``excessive risk taking.''

    ..........................................................

    Just think....

    If the non-exchange related derivatives did not exist....
    Would there be a problem today ?

    .....................................................

    Finally someone recognizes that brokers' commissions go up as risk increases....is not a great idea after all........
     
  6. "Accounting Rules

    The leaders said they'd push to change accounting rules that require banks to review their holdings each quarter and report losses when the values decline, the so-called mark-to- market standard. Banks worldwide have written down $587.7 billion since last year, according to data compiled by Bloomberg."


    http://www.bloomberg.com/apps/news?pid=20601087&sid=ahRfKRDPT_Ww&refer=home
     

  7. The problem would not be anywhere near as large. And there would not be a counterparty risk problem as we have today.


    We are at the opposite end of the risk spectrum now with no one willing to buy MBS's at ANY price(even 5 cents on the dollar!)


    2 years ago they could sell the stuff like it was t-bills with zero risk.
     

  8. lots of calls for suspension of mtm this am on cnbc.
     

  9. things to buy on suspension of mtm:

    Banks C BAC
    Brokers MS
    Bond Insurers MBI ABK
    XLF
     
  10. SEC is suspending reality.
     
    #10     Oct 8, 2008