After railing at greedy bankers and traders the politicians are now after fair-value accounting. May sound dull, but this is one way for banks to manipulate their results & deceive investors.
Sarkozy, the EU, and even David Cameron have started criticising fair value rules saying that they have made the current credit crisis worse.
Errr, no. The fair value rules ensure that businesses, in particular banks, value their positions at the prevailing market rates. This allows investors to see the true p&l on a position.
Without fv rule, the banks know their real prices, competitors can work out the real prices, but investors are left in the dark.
This is just a diversion tactic to try and shift some blame for the current fiasco.
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