SEC to banks: Remember we told you to tell the truth? Just kidding.
SEC gives banks more leeway on mark-to-market
Wed Oct 1, 2008 3:24am EDT
By John Poirier and Emily Chasan
WASHINGTON (Reuters) - U.S. securities regulators on Tuesday gave the financial industry a reprieve from marking hard-to-value assets down to fire sale prices, throwing a lifeline to an industry beset by strained credit markets and the latest round of bank failures.
The U.S. stock market added to gains on the news, in hopes that regulators' new interpretation of fair value, or mark-to-market, accounting rules, will slow or reverse the heavy flow of mortgage-related losses on banks' balance sheets.
In the new guidance, first reported by Reuters, the U.S. Securities and Exchange Commission reminded financial services firms that they don't need to use fire sale prices when evaluating their hard to price assets.
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