Mark-to-Market Accounting: The Risky Valuation Technique Impacting Financial Stability
The article discusses the debate between historical cost and mark-to-market accounting for valuing assets. It explores the implications of using these different methods and their impact on regulation and private valuation. The researchers argue that accounting rules do matter, especially in times of financial uncertainty, and that default rules also play a significant role. Ultimately, the article highlights the importance of valuation methods in determining the true value of assets, especially in turbulent markets.