Tuesday, April 28, 2009
One Truth Teller
"Charles Bowsher said he resigned last month as chairman of the Federal Home Loan Bank system's Office of Finance because he wasn't comfortable with the way the banks value their mortgage securities. 'I decided I didn't have confidence in the financial statements,' Mr. Bowsher said in an interview, confirming remarks that previously appeared in a Bloomberg News article. Mr. Bowser, a former partner at the accounting firm Arthur Andersen, said he believes financial companies generally, not just the home-loan banks, have too much discretion in valuing assets such as mortgage securities. 'They put a lot of assumptions in there,' he said", James Haggerty at the WSJ, 4 April 2009.
I wonder if Barney Frank wants Bowsher's old job. I agree with Bowsher and see bank accounting getting worse with the newly revised SFAS 157.