Tricounty News

Bachmann Commends FASB - for Mark-to-Market Reform

(Washington, DC) U.S. Representative Michele Bachmann (MN-06) today released the following statement in response to the Financial Accounting Standards Board's announcement that would relax "mark-to-market" accounting rules to allow companies to more accurately reflect the true, long-term value of their assets:   "I am thrilled that FASB has taken this long-overdue action to improve mark-to-market standards. During the height of debate over the $700-billion TARP bailout, I, along with more than 60 other Members, wrote the SEC and asked them to suspend mark-to-market and replace it with a form of mark-to-value that could accurately reflect the true, long-term value of institutions' assets.    "The current fair value accounting rules are pro-cyclical and over-value assets in a rising marketplace while under-valuing losses in a declining one.  Neither is really beneficial for assessing the true value of assets, but in a declining marketplace it clearly has the worst impact on stakeholders across the board.  And in the current economy, it has been truly detrimental to our recovery.   "Our financial system needs to find a way to unleash capital that is sitting on the sidelines--both in investors' pockets and on bank balance sheets--so that businesses and consumers alike may return to a more stable lending environment. Adjusting mark-to-market standards is a critical step towards accomplishing these goals.   "I have had numerous conversations with both financial services institutions and those in the accounting industry, and I pledge my commitment to continue fighting for more accurate accounting practices. I am encouraged that our voices were finally heard.   "Immediately following FASB's announcement, shares rose for many Wall Street giants, including Citigroup and Bank of America.  Bloomberg has reported that 'FASB's changes could raise bank industry earnings by 20 percent,' helping our economic recovery."