Make Sure the Bunker is Well Stocked

Mike Whitney
Information Clearing House
August 29, 2010

Robert Herz was forced to resign from his job as as chairman of the Financial Accounting Standards Board (FASB) because he insisted that the banks assign a fair value to their assets. That’s not what you’ll read in the papers, but it’s true just the same. Herz was a major proponent of mark-to-market accounting, a simple means of determining the value of a bond or security by comparing the price of similar assets sold at market. In other words, Herz is a defender of universally-accepted accounting principles, which is why he was terminated, er, I mean, resigned. According to the Wall Street Journal:

“A new front has opened up in the war over mark-to-market accounting. Suddenly banks find themselves with an unexpected advantage in the fight over how they should value their vast holdings of financial instruments

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