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Mark-to-Market Accounting: Shooting Ourselves in the Foot

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Publication Date: March 2009

Publisher(s): National Center for Policy Analysis (U.S.)

Author(s): Robert McTeer

Funder(s): National Center for Policy Analysis (U.S.)

Funder(s): National Center for Policy Analysis (U.S.)

Topic: Banking and finance (Investments and securities)
Business (Accounting)
Business (Business operations and practices)

Keywords: mortgage; FASB; financial crisis; subprime

Type: Brief

Coverage: United States

Abstract:

One of the main causes of the 2008 financial crisis and current recession was subprime mortgages, which are home loans to borrowers with low credit scores, little or no down payment and high levels of debt. These borrowers have a higher risk of defaulting on their loans and are usually charged higher interest rates.