A number of banks encountered problems because a change in accounting rules required firms to mark assets at their original purchase price.

Question

Quizplus · Accepted Answer

This statement is incorrect. A change in accounting rules requiring firms to mark assets at their original purchase price would actually result in less volatility and potential problems for banks. In reality, many banks encountered problems during the financial crisis due to assets being marked-to-market, or valued at their current market price, rather than their original purchase price.

A Number of Banks Encountered Problems Because a Change in Accounting