Financials build steam on mark-to-market accounting

This change allows banks to make up values for illiquid, toxic loans. It is good for the banks in that they do not have to declare huge losses on valueless assets. But disguising losses does not make the losses go away. The stock market is flying on this news with the Dow up 250 points mid-day.-Lou

Financials build steam on mark-to-market accounting

NEW YORK (MarketWatch) -- U.S. financial stocks rose Thursday, drawing strength from a decision made by the nation's accounting arbiter to ease guidelines that would have the effect of helping bolster the bottom line at troubled banks.

Responding to calls for change from Wall Street and lawmakers on Capitol Hill, the Financial Accounting Standards Board agreed with agency staff proposals to give auditors more flexibility in valuing illiquid mortgage assets that may have long-term value and strong cash flow.

The five-member agency is expected to vote formally on the measure later Thursday.

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