what are the arguments in favor of removing mark to market accounting?
This was selected as Best Answer The arguments in favor of removing mark to market revolve around increasing the liquidity of banks and decreasing the volatility of the asset base of banks. Since many of the assets valued under mark to market are going to be held to maturity, the argument is that since mark to market is a short term view, a “snapshot” if you will, it is not important to the overall health of the bank. Since the bonds are going to be held to maturity, not traded, they will mature at par and so the interim prices are unimportant and only add to the volatility of the bank’s portfolio. btw- although I understand the problems inherent in mark to market…I think the arguments to remove mark to market are absurd. If anyone can explain to me why removing market transparency and realistic asset pricing is GOOD for the markets….well, more power to you. I compare it to issuing a decree like “Let’s not print any more bad news in the papers” in hopes that the absence of reportin
