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SEC won't seek to suspend mark to market
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission is not planning to suspend the controversial mark-to-market accounting rule that has forced banks to report billions of dollars in asset write-downs, a source familiar with the matter told Reuters on Tuesday.
Rumors have circulated that the U.S. government was planning a temporary suspension of the accounting rule, which requires financial services companies to value assets at current market prices.
The SEC, which oversees and enforces accounting policy, is "not planning a suspension" of mark-to-market, said the source, who was not authorized to speak on the matter and therefore requested anonymity.
Business groups have been pleading with the SEC and the Financial Accounting Standards Board to suspend or amend the rule so that banks will be able to account for their hard-to-value assets more favorably amid the distressed markets.
A House Financial Services subcommittee is set to examine the accounting rule on Thursday. Ahead of the hearing, dozens of business groups and federal home loan banks expressed their concerns to the top lawmakers on the full House Financial Services Committee.
"Appropriate changes in mark-to-market accounting should not wait until mid-year or year-end," said the letter addressed to Barney Frank of Massachusetts, the committee's chairman, and Spencer Bachus of Alabama, the committee's top Republican.
"That will only allow the spiral of accounting-driven financial losses to continue," the letter said.
The letter, dated March 9, was signed by some of the biggest industry groups, such as the U.S. Chamber of Commerce and the American Bankers Association as well as a number of federal home loan banks.
(Reporting by Rachelle Younglai, editing by Gerald E. McCormick and Lisa Von Ahn)
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