【正文】 , it is difficult to evaluate the role of FVA in the current crisis. In particular, we need more work on the question of whether market prices significantly deviated from fundamental values during this crisis and more evidence that FVA did have an effect above and beyond the procyclicality of asset values and bank lending. In Section 2, we provide a quick overview over FVA and some of the key arguments for and against FVA. In Section 3, we pare FVA and HCA and shortly discuss fundamental tradeoffs involved when choosing one or the other. In Section 4, we discuss the concern that FVA contributes to contagion and procyclicality as well as ways to address this concern, including how current accounting practices help to alleviate problems of contagion. We consider potential implementation problems in Section 5. In Section 6 we take a closer look at the banks’ positions on FVA and conclude with suggestions for future research in Section 7. 2. Fairvalue accounting: What is it and what are the key arguments? FVA is a way to measure assets and liabilities that appear on a pany’s balance sheet. FAS 157 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” When quoted prices in active markets for identical assets or liabilities are available, they have to be used as the measurement for fair value (Level 1 inputs). If not, Level 2 or Level 3 inputs should be used. Level 2 applies to cases for which there are observable inputs, which includes quoted prices for similar assets or liabilities in active markets, quoted prices from identical or similar assets in 4inactive markets, and other relevant market data. Level 3 inputs are unobservable inputs (., model assumptions). They should be used to derive a fair value if observable inputs are not available, which is monly referred to as a marktomodel approach. Fair value is defined similarly under IFRS as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties, in an arm’s length transaction. In determining fair value, IFRS make similar distinctions among inputs as FAS 157: Quoted prices in active markets must be used as fair value when available. In the absence of such prices, an entity should use valuation techniques and all relevant market information that is available so that valuation techniques maximize the use of observable inputs (IAS 39). It is recognized that an entity might have to make significant adjustments to an observed price in order to arrive at the price at which an orderly transaction would have taken place (., IASB Expert Advisory Panel, 2020). Under both . GAAP and IFRS, fair values are most frequently used for financial assets and liabilities. But even for financial assets and liabilities, there is a mixed attribute model with a multitude of rules stipulating that some items are reported at fair value and others are reported at historical cost. Moreover, unrealized gains and losses of items that are reported at fair value may or may not affect ine, depending on their classification. For instance, FAS 115, which was already implemented in 1994, requires that both trading securities and availableforsale securities are reported in the balance sheet at fair value. But in the ine statement, unrealized gains and losses, ., changes in these values are recognized for trading securities only. In contrast, financial instruments that are heldtomaturity are reported at amortized costs but fair values could be used in determining impairments for these items. In addition, fair values are used for disclosures in the notes to the financial statements (., FAS 107). 5Proponents argue that fair values for assets or liabilities reflect current market conditions and hence provide timely information, thereby increasing transparency and encouraging prompt corrective actions. Few dispute that transparency is important. But the controversy rests on whether FVA is indeed helpful in providing transparency and whether it leads undesirable actions on the part of banks and firms. Opponents claim that fair value is not relevant and potentially misleading for assets that are held for a long period and, in particular, to maturity。 that fair values based on models are not reliable。 Barberis and Thaler, 2020). Moreover, a liquidity crunch can affect market prices (., Shleifer and Vishny, 1992). 5 It is worth pointing out that collateral and margin calls can trigger a downward spiral, ., increased collateral or margin requirements and falling prices can reinforce each other (Shleifer and Vishny, 1992。 it results from the use of market values in bilateral contracts. See Section 4 for a discussion of how FVA in financial crises. 7The important question, however, is how to deal with this problem. Potential market inefficiencies can be addressed in a variety of ways and again HCA is not the only alternative. Historical costs do not reflect the current fundamental value of an asset either. Therefore, it might be better to use market values, even if the markets are illiquid, and to supplement them with additional disclosures, ., about the fundamental value of the asset when held to maturity. FVA does not prevent firms from providing additional information, including management’s estimates of fundamental values.6 One might counter this argument with the concern that investors may overlook information in the notes to the financial statements or that they would overreact to fair values based on current market prices despite the disclosure of (higher) fundamental values in the notes. However, we are not aware of any empirical evidence that investors systematically i