The House Financial Services Committee’s recently announced March 12 hearing on mark to market accounting
has the blogosphere abuzz with discussion of whether it will set the stage for the demise of this hotly-debated accounting rule. The Capital Markets Subcommittee, chaired by Rep. Paul Kanjorski
(D-PA), will conduct the hearing. Kanjorski’s subcommittee, comes on the heels of a letter
sent to Treasury Secretary Tim Geithner
and National Economic Council Director Larry Summers
, in which representative Kanjorski writes: “We are in a time of severe market turmoil and this accounting rule is counterproductive and, frankly, making the economic situation worse. I have heard from businesses and banks in my district about this rule and how its application has forced them to write down mortgage-related securities and other assets, thus exacerbating the credit crisis. Additionally, I believe suspending mark-to-market will save taxpayer dollars by allowing banks to avoid booking losses on securities that may have value after this credit crisis subsides. We must do something to provide financial relief and I believe temporarily suspending these accounting rules is one important step we must take.”
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