A new survey of institutional investors shows that a wide majority object to a proposal to expand the use of fair value accounting, reflecting the steady drumbeat of criticism heard during the official comment period on the proposed rule.

Some 66% of investors are either strongly or very opposed to the idea, according to a study released Tuesday by Keefe, Bruyette & Woods and Greenwich Associates. Only 20% of the 62 respondents said they are in favor of the Financial Accounting Standard Board's recommend change.

But the survey was not an endorsement of the status quo. Some 70% of investors said they would support an alternative proposal that would require banks to include enhanced disclosures about fair value in quarterly and annual regulatory filings, but not on the balance sheet.

Up to 45% of the investors said the adoption of the fair value proposal would prompt them to reduce their level of investment in U.S. banks.

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