Ben Bernanke will be on TV discussing the economic crisis, regulations and the Fed’s extraordinary actions. – Ilene
Bernanke Grants “60 Minutes” Rare Sit-Down this Sunday
Courtesy of StockJockey at 1440 Wall Street
Mark to Market accounting changes are the main event on Wall Street, and while I earned a accounting minor in my undergrad studies (which is not meant to impress) I am familiar with the endless debates that can arise over accounting theory. But if I need an expert I turn to The Accounting Onion
The problem that we really want to resolve is how to restore the banks to a sound financial footing. Even granting that financial reporting to investors could play a role (and I don’t), tweaking accounting rules that cover a surprisingly small percentage of assets that banks mark-to-market is hardly the job of Congress. Any solution must radically restructure bank regulation. Throw away any notion of capital adequacy based on capitalization ratios. Stress testing of future cash inflows and outflows is where it’s at, and that has nothing to do with financial reporting. In an world without derivatives, a strong correlation between a static capitalization ratio (based on some set of accounting rules) and the probability of future insolvency might be obtainable; but in a world of derivatives, we have learned through hard experience that Congress should acknowledge, that it is now nothing more than wishful thinking. The Accounting Onion
Jim Selling goes on to add…
Accounting rules, no matter how you regard them, were established to benefit investor interests. They have had nothing to do with what everyone agrees is much needed financial reform. Fixating on the accounting rules is not unlike choosing to buff the scratches out of a car that won’t start, instead of opening up the hood to diagnose the real problem.
Will Bernanke’s appearance address this, and broader regulatory issues?
Chances are it will. Bernanke has endorsed another solution:
Ben Bernanke has proposed ‘hold-to-maturity’ purchase price instead of current market value described as ‘fire-sale’ price.
Will Ben explain this further? Forget about suspending mark to market, Ben might float trial balloons that he has discussed with SEC and FASB, and might speak to the quantitative easing paths many expect him to take.
Ben is rising to the occasion, which is good given Treasury Secretary Geithner is stuck in the mud.
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Mark-to-Market Accounting: Scapegoat for the Failure to Properly Regulate Banks
The Accounting Onion
March 12th
‘Fire-Sale’ Vs. ‘Hold-to-Maturity’ Prices: How Should Troubled Assets Be Valued?
RGE Monitor
Policy Makers in the Spotlight as They Fire up the Printing Presses
1440 Wall Street
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(CBS) Sunday’s 60 Minutes will feature a rare interview with a sitting Federal Reserve chairman – the first in 20 years – in which Ben Bernanke tells correspondent Scott Pelley what he thinks went wrong with America’s financial system, how it caused the economic crisis, what the Federal Reserve is doing to help fix it and when he expects the crippling recession to end.
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The interview, Bernanke’s first on the record since he became Federal Reserve chair, will be broadcast this Sunday, March 15, at 7 p.m. ET/PT.
In the interview, Bernanke also talks about the failure of Lehman Brothers, the rescue plan for AIG and the Fed’s extraordinary actions taken since the beginning of the economic crisis. The Fed Chairman also discusses how regulations might change in the future.
The double-length segment also includes an interview in Dillon, S.C., where Bernanke grew up. 60 Minutes accompanied the Fed chairman to his home town, where he visited his old high school and talked to Pelley about how the current financial crisis is taking its toll on Main Street America.
Fed Chief Bernanke Grants Rare Interview
CBS
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