The top US securities regulator said Wednesday she is pushing accounting rulemakers to issue new guidance on mark-to-market accounting in the second quarter to help financial services firms value illiquid assets.
"FASB (Financial Accounting Standards Board) has committed to us that the guidance will be out in the second quarter," Mary Schapiro, chairwoman of the Securities and Exchange Commission said at a hearing by a House Appropriations subcommittee on the agencys annual budget needs.
The mark-to-market accounting rule, which require assets to be valued at market prices, is defended by investor advocates and some lawmakers as a way to give investors a clear picture of what assets are held on banks books. But the banking industry, which has been forced to write down billions of dollars worth of hard-to-value assets in the illiquid markets, has pleaded for a suspension or modification of the rule. Schapiro said it was not the SECs intention to force banks to write down assets to fire-sale prices.
There is "real concern" about how mark-to-market accounting rules have been applied, she told the subcommittee. "Does it force (financial firms) to write assets down to fire-sale prices? Is it creating more volatility than is appropriate?" she said.
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