The Financial Accounting Standards Board (FASB) is in the process of making banks very unhappy. In a complete reversal from their revised policy released in April, it is considering vastly tightening mark-to-market requirements to include virtually all securities on a bank’s balance sheet. Yes, it even wants the very, very illiquid stuff marked-to-market.
Might be nothing, but it could get interesting if regulators decide to bring back MTM rules. IMHO, the elimination of MTM rules is what’s given the appearance of “green shoots.” Note how the rule change was announced in mid-March, and enacted in April — exactly when we saw the reversal.
