Bankers resist, because it could force them to recognize losses they would prefer to delay.
Indeed, E*Trade, as is common practice, does not recognize losses in problem loans until it considers them "permanently impaired".
At the same time, new accounting rules are forcing banks to recognize losses on securities portfolios, draining away their earnings.
American banks have been quick to recognize losses, and policy makers have moved to contain the damage and protect the broader economy.
If A.I.G. failed to produce the required amounts, the financial institutions holding its contracts would have to recognize losses of their own.
If there were an active market in troubled assets, the banks might have to recognize losses they now can pretend will vanish if they are ignored.
During the last several years, credit agencies have cut their ratings on many of the bonds, but Fannie Mae has been slower than some competitors to recognize losses on them.
In the end, banks were reluctant to sell their assets to the government for prices that would have forced them to recognize losses, and the public-private funds invested less than thirty billion dollars.
He expects that to be particularly true in Spain, where Santander and other banks sit on failed real estate loans worth hundreds of billions of euros but have been slow to recognize losses on most of them.
| The decision by UniCredit, the largest Italian bank, to recognize losses on its assets raises questions about other European banks, which collectively trade at about 44 percent of their so-called book value, Jonathan Weil writes in a column in Bloomberg News.
