The Shadow Committee believes that despite the shortcomings ofFAS 157 (Fair Value Measurements), simply suspending the accounting rulewould be a mistake. Instead, the Committee recommends that the SEC and banking agencies make a concerted effort to require more detailed information about the holdings of specific financial assets as well as the methods by which the assets are valued.

Enormous losses could have been avoidedif the SEC and the FASB had recognized that mark-to-market accounting should not be used when there is no active market.

U.S. adoption of International Financial Reporting Standards (IFRS), has been sidelined by the financial crisis, but deserves more attention.  Both issues illustrate the perils of political interference in financial reporting and in the process of professional standard setting.

Companies should be permitted to publish pre-fair-value accounting statements as well as marked-to-market balance sheets, which would offer investors multiple perspectives on firms' financial health.

Fair value accounting has been the principal cause of an unprecedented decline in asset values and an unprecedented rise in instability among financial institutions.

Since the 1930s, accountants and bank regulators have recognized the inherent weaknesses of mark-to-market accounting.

Independent bodies like the Financial Accounting Standards Board need a system of check and balances.