“in reality, we all looked for reasons why the problem would not be contagious.”
jeremy newman, the global ceo of bdo, blogs at the huffington post:
when problems first emerged in the sub-prime debt market, no-one was prepared to recognize the scale of the impact. in reality, we all looked for reasons why the problem would not be contagious.
should accountants and auditors have identified these issues? should regulators have realized the vulnerability of banks’ capital and reserves? should governments have recognized that a problem in one bank would affect others? the answer to all these questions is “probably.” we believed that real value was being created by these new financial instruments and wanted to believe that the “good times” were here to stay.
still,
abandoning mark-to-market merely allows those who want to pretend that the crisis isn’t real, to do so.
more at growth, jobs and stability: the role of the accounting profession
meanwhile, the prolific and influential dennis howlett at accmanpro.com sees some refreshing candor in newman’s remarks.
thank goodness he has not been infected with the acquired need to talk double speak or legally sanitzed pr nonsense. his blog at the huffington post talks directly to the issue of mark to market in a way that must surely leave the big 4 blushing yet takes responsibility for the profession as a whole.
