Bailing Out of FAS 157

As I mentioned in an earlier post, there has been discussion about the role of the valuation rules of FAS 157 in the gruesome fate of many of our financial institutions. Even Newt Gingrich (via Forbes) has weighed in.

Section 132 of the bailout bill passed by the Senate and the House (2007 CONG US HR 1424, 10/1/08 engrossed amendment) would allow the SEC to suspend FAS 157. Section 133 of the bill would require the SEC to produce a report analyzing the role of FAS 157 in bank failures.