If Fed Helps Banks with Valuations, Is There Independence?
According to a November 8, 2007 Bloomberg report, Federal Reserve Chairman Ben S. Bernanke says `"We are working with the banks, the ones who sponsor these off-balance-sheet instruments, to make sure that they are getting true valuations,'" Click here to read the full story.
A few things come to mind.
1. What form of "help" is offered?
2. How can federal regulators assist with orderly asset write-downs and then still be in a position to independently review the banks' process?
3. Will tough questions be asked about how banks, going forward, will attempt to avoid another sub-prime (or related) debacle? If there is a silver lining, let it be good lessons learned about modeling and risk controls.
