Once MBS selling started, all MBS mark-to-market "value" got affected, forcing many holders to sell. Such snowballing made more "capital" loss which forced the FASB to change the accounting rule.
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wsj
FASB Eases Mark-to-Market Rules
By
Kara Scannell
Updated April 3, 2009 12:01 a.m. ET
U.S. accounting rule makers made it easier for banks to limit losses, but in an unexpected move they bowed to critics and backtracked on one proposal that would have let companies ignore market prices in some cases.
The vote by the Financial Accounting Standards Board followed a debate in which members of Congress pushed for steps to help banks weighed down by troubled assets, while some investor groups warned that the plans would allow executives to cover up losses. The rules change spurred Thursday's stock-market rally.
---------------------------
wsj
FASB Eases Mark-to-Market Rules
By
Kara Scannell
Updated April 3, 2009 12:01 a.m. ET
U.S. accounting rule makers made it easier for banks to limit losses, but in an unexpected move they bowed to critics and backtracked on one proposal that would have let companies ignore market prices in some cases.
The vote by the Financial Accounting Standards Board followed a debate in which members of Congress pushed for steps to help banks weighed down by troubled assets, while some investor groups warned that the plans would allow executives to cover up losses. The rules change spurred Thursday's stock-market rally.
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