The American Bankers Association is asking again for the government to quickly ease mark-to-market accounting rules.
In a letter to Treasury Secretary Henry Paulson, ABA President Ed Yingling on Tuesday urged the Treasury to act on fair-value accounting before the yearend.
"With market prices continuing to fall well below the actual performance of bank assets, delay in addressing the failures of the mark-to-market mechanisms in fair-value reporting will undo much of the work of the Treasury's Capital Purchase Program," Mr. Yingling wrote.
Mr. Yingling said that the Securities and Exchange Commission should base its accounting rules for other than temporary impairments on actual credit impairment; the definition of fair value should be based on the price of a willing buyer or seller, rather than the exit price; and new rules for mergers based on fair value should be delayed.
"These changes will actually improve financial reporting for users of financial institutions' financial statements, as the current illiquid values required to be reported have a significant downward bias, which results in overstating losses," he wrote.