To the Editor:

In "Fed Seconds Fair-Value Plan Critique," [Sept. 15] Fed Gov. Duke's comments strike a chord. An environment in which banks must navigate between external accountants and regulators is a disruptive environment. The underlying issue is the need to provide a return to shareholders, for which risk must be taken. The basic question is whether banks are growth organizations or utilities, and at this point the former is the clear answer. This presents challenges of first determining what accountants call revenue and expense for purposes of reporting profits to shareholders, and then what regulators permit in terms of risk and how it is measured. If banks were utilities, risks and returns would be dictated, and that's at the heart of the current debate. If we wish to eliminate the risk of failure, we will eliminate the opportunity to succeed. Quantifying our tolerance and managing to our desired outcomes is particularly problematic when the scorekeepers disagree.

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