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Many banks simply ignored rules requiring disclosure of how they estimated the fair value of securities.
The value of securities depends on the issuer's financial condition, products and markets, management, and the competitive and regulatory climate.
Through most of the 1990s, its staff barely grew, even though the volume and value of securities transactions exploded.
In some cases, banks are now required to report the fair value — normally the market value — of securities they own.
Ratings artificially increased the value of securities, and subsequent downgrades left leveraged institutions with severe capital shortfalls.
Brokerage firms and investment banks often require investors to sell shares to help make up for the value of securities the investor has bought with borrowed money.
The value of securities is linked, in (sometimes very) complex ways, to underlying material assets, which will be affected by natural hazards.
The Financial Services Authority said it opposed any rules that required banks to provide current prices or the value of securities they buy and sell.
Mr. Chlapowski said the problem, which was discovered by auditors from PricewaterhouseCoopers, revealed shortcomings in a new computer system meant to track the value of securities.
Some will go to those who insured the value of securities, like Ambac Financial, which surprised Wall Street by posting its first quarterly loss this week.
As defaults continued to rise, the value of securities backed by subprime mortgages plummeted and investors shied away from purchasing the risky debt.
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