So the banks can mark a toxic asset worth crap into a much higher value to show faked big assets on their balanced sheet. In this case we are back to the same problem that caused the crisis to begin with. This is insane.
No, this will allow banks to mark an asset at what they one day hope to be able to sell it for. If the bank has enough liquidity to hold onto the asset there is no reason they should be forced to undervalue it.
No jveritas its not that stark. If the mortgage owner is making payments, the mortgage is worth something not zero.
What market to market said essentially was if you can’t sell the asset today (with no market price), then it is worth nothing. But my house isn’t worth what I could sell it for in the next 24 hours, its worth something.
It forced them to take what are long-term assets and mark them down as if they were short-term ones, based on current market conditions.
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Your right, banks can now have you look at long term assets through rose colored glasses. Ain’t no bank going to be realistic, the market conditions and depreciation won’t be represented so to maximize valuation on every asset