In an earlier post I noted in passing the role of changes in accounting rules and the role that played in bringing the financial crisis to a head at this time. John Berlau has helpful deeper discussion in a WSJ column here and blog post here. It is plausible that mark-to-market contributed to bring this to a head. Nonetheless, I’m not sure that I agree with Berlau’s conclusion of relax mark-to-market (of course, I’m not sure that we shouldn’t relax mark-to-market either)–it really depends on whether mark-to-market is creating liquidity problems or preventing deeper fraud. Berlau seems to believe the former and Paulson the latter.
Update:
Hans Bader has more.