BANKING & FINANCE - March 18, 1993

FASB Fails to Support Accounting Proposal: The proposal to require financial institutions to account for their securities holdings at market value is in jeopardy after the current plan failed to get the Financial Accounting Standards Board’s support. Three members of the seven-member FASB, which sets accounting rules, voted against the plan, which needed a 5-2 vote to pass. The banking and insurance industries oppose the plan because they believe “mark-to-market” accounting would make their financial statements too volatile. Current practice only requires financial institutions to report the market value of their securities in the footnotes to their financial statements.