Economic Times: Europe to suspend banks mark-to-market accounting- "Legalizing Banking Fraud"
Europe to suspend banks mark-to-market accounting- "Legalizing Banking Fraud"
European leaders have agreed to seek measures to suspend so-called "mark-to-market" accountancy rules in order to stabilise bank balance sheets, a statement said on Sunday. According to an action plan released by the 15 leaders of the eurozone single-currency bloc, equities held by banks will no longer be recorded at their current values on the world's severely depressed markets. "Under the current exceptional circumstances, financial institutions should be allowed to value their assets consistently with risk of default assumptions rather than immediate market value which, in illiquid markets, may no longer be appropriate," the statement said.
The leaders hope that by suspending this requirement, banks balance sheets will look more healthy and the risks will be reduced that they be swept away by a run on the markets.
Labels: Banking system, EU, Eurozone, meltdown
