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Regulator Before Banks Collapsed, They Pleaded With Feds To Let Them Fudge Their Books


Ryan Grim Huffington Post March 13, 2009 www.huffingtonpost.com Before financial institutions have collapsed over the past several months, they have come to the Financial Accounting Standards Board, pleading for a change in mark-to-market accounting rules so that they can continue to appear to be solvent on their balance sheets. Robert Herz, head of the FASB, told a panel of lawmakers Thursday that the loudest critics of fair market accounting practices have been the very same banks that have gone belly up when regulators would not let them adjust their accounting. “There seems to be a clamoring for changing mark-to-market rules that seems to come largely from institutions that may be insolvent,” Rep. Alan Grayson (D-Fla.) said to Herz at a meeting of the Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. Grayson said that, from Herz testimony, it seemed that “there may be institutions that are insolvent and they havent been forced to write down their books to the point [of insolvency] yet, and those are maybe the same institutions that are asking us to modify the mark-to-market rules so that they wont have to admit that theyre bankrupt. Is that correct?” Herz said that it was. “I share your point of view and I will tell you that I get calls and visits from some of those institutions that are now in government hands, about two weeks before they get taken over, trying to get the accounting changed,” he said. “Clearly some

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2 Responses to "Regulator Before Banks Collapsed, They Pleaded With Feds To Let Them Fudge Their Books"

  1. geneleangreen says:
    Who’s the person asking questions?
  2. probinsontx says:
    one of the few times i laughed during this discussion.

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