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Unformatted text preview: Banks can disregard distress sales that do not accurately reflect real market values. Allowed more judgment by management and more ability to control the numbers they report. What was the rationale for modifying mark-to-market accounting? Many banks were content with the rule when the market was up, but mark-to-market became a problem in late 2007 when the market began to plummet. Stocks and bond markets were tanking. The market values of some securities, mostly mortgage backed securities, are now far below the real value that will be realized over time. What particular problem do banks face when forced to write-down assets? The bad mortgages outweigh the good ones....
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- Fall '10
- Mark-To-Market Accounting