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To: ex-Texan
Sarbanes-Oxley, imposed upon businesses after the Enron collapse, requires that companies carry assets at actual value, or "mark-to-market."

The Federal Reserve forbids banks from using mark-to-market.

Go figure.

8 posted on 11/23/2012 3:02:54 PM PST by E. Pluribus Unum (Labor unions are the Communist Party of the USA.)
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To: E. Pluribus Unum
The Federal Reserve forbids banks from using mark-to-market.

A major problem with mark-to-market is that it presumes that n units of something will be worth n times the market price of one unit. In some cases, estimating the worth of assets based upon their marginal market value may be more accurate than estimating their worth via any other means, but that doesn't mean it should be prescribed as a standard. Prescribing such a standard is in fact liable to make it less accurate as an estimation of worth.

37 posted on 11/23/2012 4:32:59 PM PST by supercat (Renounce Covetousness.)
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