Dow Jones
By Brian Blackstone
20.03.2009 16:22
U.S. Federal Reserve Chairman Ben Bernanke said Friday that regulators may need to modify capital and accounting rules to make sure they don't magnify ups and downs in the financial markets.
"Policymakers should review existing capital rules and accounting standards to determine whether these rules and standards could be modified to reduce their potential to have unduly procyclical effects without weakening their ability to achieve their fundamental objectives," Bernanke said in prepared remarks to a conference of community bankers. (He added, I'm running out of hats folks.-AM)
Accounting rules, specifically mark-to-market, have been a hot topic of late. Bernanke has said in the past that while he doesn't support suspension of mark-to-market, the issue of how to value illiquid assets must be addressed. (He added, ladies and gentlemen I understand that FAS157 does provide guidance as to how one values illiquid assets but folks some assets are more illiquid then others.-AM)
"As many institutions and auditors will attest, determining the appropriate valuation of illiquid or idiosyncratic assets can be very challenging, especially in highly strained market conditions," Bernanke said Friday, adding he's "pleased" that the Financial Accounting Standards Board is issuing guidance on the issue.(He added, nothing up my sleeve... presto.. hmmm looks like I need another hat.-AM)
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