The limitations of market value accounting and a more realistic alternative

Accounting and prudential regulation: from uncomfortable bedfellows to perfect partners?

“…See IASB (2003d) andIAIS (2003). 22 See, for instance, Berger et al (1991) for an early suggestion in the same spirit, as an alternative to market value accounting for loans. Consistent with the gradual shift in views, the IASB has recently allowed losses on loans to be calculated on a portfolio, as opposed to individual basis, even for "individually significant" loans; compare IAS 39 in IASB (2002) with its new version (IASB, 2003c).…”

Bank loan-loss provisioning, central bank rules vs. estimation: The case of Portugal

“…It seeks to answer questions raised by Berger et al (1989Berger et al ( ,1991 who, in their critical review of market value accounting, suggest that value adjustment for credit risk should be based on a loan-loss reserve on nonperforming loans.…”

Who pays for bank insolvency?

“…23 Tangible equity capital to total assets ratio. 24 Berger et al (1991) provide an early exposition of the accounting valuation problems involved. 25 While meeting the Basel requirements probably involves simultaneous solvency in the MHL sense, if the minimum Basel conditions are breached, the authorities would be well advised to switch to focus on solvency in deciding upon the appropriate course of action.…”