not require banks to use fair-value accounting, a coalition of industry groups from the United States, Austria, Canada, Europe, and Japan wrote last week. Fair-value accounting could mislead investors about the true health of banks, they said in a joint letter. In fair-value accounting, assets and liabilities are carried on a balance sheet according to their current worth, as opposed to their historical cost. That could be a problem for banks, which currently value only securities held for sale or trading at market price, the groups said. The rest are kept on the balance sheet at their historical cost. Suddenly valuing all securities at market price could artificially inflate or deflate balance sheets, the groups said. Similarly, interest rate fluctuations could affect the current value of deposits and long-term debt, they said. The committee is a global organization working to complete a universally accepted set of accounting standards for cross-border securities filings. It is meeting this week in Zurich to debate expanding the use of fair-value accounting. It is expected to vote on the proposal next month. The measure being studied by the committee "does not reflect how most banks manage their business," said Paul V. Salfi, senior financial policy analyst at the American Bankers Association, which signed the letter. "It would misrepresent banking activities to investors."

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