Financial institutions applaud the accounting-rule changes, but investors could end up losing even more faith in the banking sector
The Obama Administration has moved swiftly over the past two months to reassure the markets it is doing everything it can to stabilize the financial system: stress-testing banks, planning auctions to buy their questionable assets, making capital available to the ones that need it. Have accounting rulemakers thrown a wrench in the works?
After intense pressure from lawmakers and some factions of the financial industry, the Financial Accounting Standards Board (FASB) voted on Apr. 2 to make it easier for corporate management to value assets on their balance sheets with less regard for market prices. The board, which sets U.S. accounting policy, was cheered on by the banking sector and pressured by Congress.
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