On March 17, 2009, the Financial Accounting Standards Board (the “FASB”) issued FSP FAS 157-e, Determining Whether a Market is Not Active and a Transaction is Not Distressed, revised guidance on mark-to-market accounting. The new guidance clarifies what constitutes an “inactive market” and a “distressed sale” under current fair value (or “mark-to-market”) accounting standards. The FASB also released FSP FAS 115-a, FAS 124-a, and EITF 99-20-b which revises other-than-temporary impairment (“OTTI”) accounting procedures, in an effort to address many of the concerns that have put mark-to market accounting in the spotlight as a potential factor contributing to the current financial crisis. The FASB’s action followed a March 12, 2009 hearing of the House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Entities (the “Committee”) on fair value accounting. Legislators at the hearing urged the FASB to act quickly, indicating that any failure to do so could result in Congressional intervention. The Committee held the hearing after the American Bankers Association (the “ABA”), the U.S. Chamber of Commerce, the Federal Home Loan Banks, and numerous industry groups requested that federal regulators urge the FASB to issue guidance expeditiously.

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