Research: Is fair value really fair?

As the United States continues its struggle to emerge from the worst economic crisis since the Great Depression, a practice known as fair-value accounting has been taking heat. Critics—mostly banking associations—say it worsened the recession’s impact on banks, restricting their ability to lend money. Congress, prodded by banking industry lobbyists, has held hearings on the subject and pressured the Financial Accounting Standards Board, which responded swiftly with changes. And the debate has continued in both mainstream business publications and academic journals.

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