McCain, Subprime Crisis, SEC & Suspension of Mark To Market

This is good news. The McCain Camp is announcing that the SEC is partially suspending the recently intstituted mark to market accounting rules. This rule is playing a significant role in causing the current fiscal crisis. And once again, it appears McCain was on the side of the angels, calling for suspension of the mark to market rule months before the subprime crisis materialized.
_________________________________________________

"Mark to market" requires accounting for the present day, fair market value of all assets. Given no market exists for subprime loans and related securities at the moment, financial institutions are being forced to account for them at far less than their actual value. Getting rid of mark to market accounting was a part of the House Bill that was killed Monday. The SEC has decided to act unilaterally. This from the McCain Camp, noting the suspension and McCain calls in the months leading up to this crisis.

ARLINGTON, VA -- Today, Doug Holtz-Eakin, McCain-Palin 2008 Senior Policy Adviser, issued the following statement on the SEC's plan to relax mark-to-market accounting requirements:

"John McCain is pleased to see that the SEC has finally decided to permit alternative accounting methods to mark-to-market accounting for securities where no active market exists. There is serious concern that these accounting rules are worsening the credit crunch, making it difficult for small businesses to stay afloat and squeezing family budgets. In March, John McCain called for a meeting of accounting professionals to discuss whether mark-to-market accounting was magnifying problems in the financial markets."

Background:

In March, John McCain Called For A Meeting Of Accounting Professionals To Analyze The Current Mark To Market Accounting Systems. "[I]t is time to convene a meeting of the nation's accounting professionals to discuss the current mark to market accounting systems. We are witnessing an unprecedented situation as banks and investors try to determine the appropriate value of the assets they are holding and there is widespread concern that this approach is exacerbating the credit crunch." (John McCain, Remarks, Santa Ana, CA, 3/25/08)

(H/T Ace)