Mark to Market Rule is Not the Problem

Prof. Ribstein writes:

Yesterday the FASB and the SEC relieved banks from marking securities to market prices that reflect “fire sale” values. . . . But wait: mark-to-market accounting just tells us reality. Shutting our eyes to that just kills the messenger, doesn’t it?

By allowing assets to be underreported, effectively the SEC has decreased
reserve requirements of banks without explicitly doing so.