FASB Relaxes Mark to Market Accounting

from Bloomberg:

The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive. The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost their first-quarter net income by 20 percent or more.

Interestingly, the lack of transparency for these instruments was one of the primary factors that created the crisis in the first place. The mark-to-market rules were instituted to correct this error. This appears to be calibrated more to reinflate the bubble -- not to correct it.