Because the GASB’s proposals ignore government's contingent liability to pay plan benefits should assets fall short, they omit the full value of plan liabilities and contradict the GASB's own standard of "interperiod equity."

An analysis of why current public sector pension accounting standards understate liabilities and encourage excessive risk-taking

The financial crisis has highlighted the institutional features of our financial system and regulatory policies that unexpectedly resulted in financial instability.

Washington D.C. can be a leader in public pension accounting reform and provide an example for municipal plans across the country-some of which are in dire condition-of how such reforms can serve to guarantee a stable pension system for municipal workers.

What's needed is the strong arm of the European Central Bank to remove catastrophic risk from the marketplace without risking the bank's core mission of fighting inflation.

In the case of the asset backed securities portfolio that the Fed acquired in support of the Bear Stearns acquisition by JPMorgan Chase the Shadow Financial Regulatory Committee suggested that the Fed disclose the names of counterparties to transactions, how transactions were priced, the quality and extent of collateralization and the current market-to-market values on those assets.

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.

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.