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FOR IMMEDIATE RELEASE Isakson Calls Again for Reform of Mark-to-Market Accounting Rules WASHINGTON – U.S. Senator Johnny Isakson, R-Ga., today called again for reform to mark-to-market accounting rules during a speech on the Senate floor. Isakson believes mark-to-market rules are disproportionately penalizing American banks. “We have looked in the mirror to find the enemy but we avoid looking at ourselves. We have been missing the mark,” Isakson said. “I hope everyone will take a look at what we are doing that may have the unintended consequence of exacerbating the economic conditions today.” Given the declines our nation has seen in the mortgage-backed securities and in real-estate, Isakson believes mark-to-market has caused tremendous problems for our nation’s banks. These rules are devastating to bankers as real estate is absorbed over time and not in one fell swoop. Isakson believes mark-to-market should not be an arbitrary write-down to zero but a recognition of the transition of values in a down market or in an up market. This issue hits at the heart of residential real estate construction lending thereby further crippling our economy from returning to a prosperous nation. Isakson said mark-to-market rules should be replaced with a mechanism of amortization or “smoothing” to absorb the assets over time. This will allow the absorption of those assets over time to be more reflective of reality and less reflective of the dire straits that our nation is currently in today. ### |
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