【正文】 Thus, we do not think that the tendency of banks to expand 8 It is important to recognize that procyclicality of FVA is more than simply reporting cycles in asset prices. That is, the expression makes only sense if we have in mind that the accounting system exacerbates the cycles in the financial system or the real economy. See Barth (2020) for a discussion of how FVA can contribute to the volatility of the accounting numbers. 9 Adrian and Shin (2020) provide evidence on a positive relation between changes in asset values and changes in leverage ratios for major (former) . investment banks. 10 The . Samp。 Banque de France, 2020。ve。 Brunnermeier and Pedersen, forthing). However, this spiral is not related to the accounting system。 and that FVA contributes to the procyclicality of the financial system.4 3. Historical cost accounting as an alternative In discussing the potential problems of FVA, it is important to also consider the alternative. Naturally, the relevant alternative depends on the assets in question. Few would argue that historical cost accounting (HCA) is an alternative for liquid assets (., stocks) in banks’ trading books. But for many, HCA is an alternative for loans, in particular, if they are held to maturity. Similarly, if we were to suspend FVA for illiquid assets in times of crisis as many have suggested, what values would we use instead? Even if one is sympathetic to the arguments against FVA, it does not automatically follow that HCA would be better, although many opponents of FVA implicitly or explicitly assume so. At times, FVA may not provide relevant information, but in many cases, (amortized) historical costs do not provide relevant information either. Moreover, even when an investor intends to hold financial assets until her retirement, she may still have an interest in the current value of these assets. Why does this logic not also apply 4 For summaries of the pros and cons of FVA and further references, see Barth (2020), Penman (2020), Benston (2020), and Ryan (2020). There is also a large literature on the value relevance of accounting numbers, which often analyzes fair values. See surveys by Barth et al. (2020) and Holthausen and Watts (2020). 6to disclosures about a firm’s financial assets? That is, even for assets that are held to maturity (., loans), investors might care about current market values, be it to evaluate past decisions in light of current market conditions or because investors have some doubts that the firm (or bank) can hold these assets to maturity. Similarly, when bank regulators set capital requirements based on expected future losses at the time of the transaction, we would expect them to adjust required capital when expectations about future losses change – and not just when losses are realized. It is surprising that some mentators seem to believe that HCA is a sound basis for capital requirements or that the liquidity of an asset should play no role when market values and liquidity play an important role in determining (ongoing) margin or collateral requirements.5 Aside from highlighting some of the shortings of HCA, these examples also illustrate that it is important to be explicit about the presumed goal(s) of accounting when we debate the merits of FVA and other alternatives, such as HCA, because their relative merits likely depend on the goal(s) of accounting. Furthermore, take the concern that observed prices may not always reflect true fundamental values and that in those cases markingtomarket is not appropriate. Clearly, it is conceivable that, at times, observed market prices deviate from fundamentals. That is, markets may not be efficient with respect to publicly available information at all times. There are transaction costs and limits to arbitrage, and market prices may be subject to behavioral biases and investor irrationality (., Shleifer, 2020。 that prices could be distorted by market inefficiencies, investor irrationality or liquidity problems。 FVA is just another example. This insight is helpful to better understand some of the arguments brought forward in the debate. 1 Strictly speaking, FVA is broader than MTM accounting, as the latter is only one way of determining the fair value. We therefore use the term FVA throughout unless we specifically mean marking to a market price. 2 For example, the American Bankers Association in its letter to the SEC in September 2020 states: “The problems that exist in today’s financial markets can be traced to many different factors. One factor that is recognized as having exacerbated these problems is fair value accounting.” Similar concerns are also shared by the US Congress, which put a strong pressure on FASB to change the accounting rules. See also, ., Wallison (2020a, 2020b), Whalen (2020), and Forbes (2020). 3 A related but different argument is that FVA provides important messages that should not be ignored (Ball, 2020). 2Second, there are legitimate concerns about marking asset values to market prices in times of financial crisis once we recognize that there are ties to contracts and regulation or that managers and investors may care about market reactions over the short term. However, it is not obvious that these problems are best addressed with changes to the accounting system. These problems could also (and perhaps more appropriately) be addressed by adjusting contracts and regulation. Moreover, the concern about the downward spiral is most pronounced for FVA in its pure form but it does not apply in the same way to FVA as stipulated by . GAAP or IFRS. Both standards allow for deviations from market prices under certain circumstances (., prices