Wednesday, March 4, 2009
This Bid's for You
(Why the market had a bid all day - the inside crowd was front-running the news.- AM)
Wed Mar 4, 2009 3:56pm EST
by Rachelle Younglai
WASHINGTON, (Reuters) - A U.S. House Financial Services subcommittee plans a hearing on mark-to-market accounting rules, which have been blamed for forcing banks to report billions of dollars in write-downs, a source briefed on the matter told Reuters on Wednesday.
The subcommittee on capital markets has tentatively scheduled the hearing for March 12, the source said.
The U.S. Securities and Exchange Commission's chief accountant and the chairman of the Financial Accounting Standards Board, will be asked to testify, the source said.
U.S. industry groups have pressured the SEC and FASB to significantly alter or suspend the accounting rule, saying it is is undermining the government's multibillion-dollar effort to stabilize the country's financial sector.
Mark-to-market accounting requires assets to be valued at current market prices. Some banks say it forces them to mark down assets to artificially low prices amid the current financial crisis when banks intend to hold the assets past the current reporting period.
The SEC and FASB are working on more guidance to help banks determine the value of an asset when there is little or no market trading.