Fair value accounting became very hard work as the credit crisis dried up once-liquid markets, SEC panelists largely agree, but it should not be blamed for causing or exacerbating corporate credit woes.
Fair value accounting received a baptism by fire when it was rolled out at the beginning of the credit crisis. And it bedeviled financial institutions that had to find prices for securities no one would buy. But fair value remains the type of financial information investors find most useful, concluded a panel of experts assembled today by the Securities and Exchange Commission.
Any talk of suspending fair value accounting, most panelists agreed, risked ignoring real economic problems and plunging the U.S. into a "lost decade" similar to that experienced by Japan when that country did not acknowledge widespread liabilities within its banking system.
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