About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

ABA Commends FASB on Progress But Says More Needs to be Done on OTTI

Subscribe to our newsletter

Following a barrage of criticism from market participants, government figures and regulators alike, the Financial Accounting Standards Board (FASB) has finally released a number of proposals concerning mark to market accounting rules. The proposals include allowing firms more leeway in determining if a market is active and whether a transaction is distressed. However, a number of bodies have already criticised the proposals, including the American Bankers Association (ABA), which says more guidance is needed, especially in the area of other than temporary impairment (OTTI).

While we are encouraged by today’s action, we believe that the proposal does not adequately address problems with OTTI, which is critically important and has been extremely controversial for many years. Specifically, losses recorded in capital should be based on economic losses rather than market losses,” the association said in a statement.

The association believes that problems with mark to market accounting have needlessly exacerbated the current economic crisis and resulted in the loss of billions of dollars in capital and therefore FASB needs to do as much as it can to improve matters.

“ABA has called for improved mark to market accounting guidance in time for companies to use it when preparing their first quarter financial reports, and we are pleased that FASB is acting a timely fashion. While we welcome today’s news, it will be important to look at the details of the written proposal to see how fully it improves the guidance. It will also be imperative to examine the practical effect the proposal will have based on the various ways it is interpreted,” the statement concludes.

ABA issued a similar statement last month, with a view to prompting further action by the FASB, but it seems that the accounting trade body has yet again failed to satisfactorily deal with the issues raised.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Mastering Data Lineage for Risk, Compliance, and AI Governance

Financial institutions are under increasing pressure to ensure data transparency, regulatory compliance, and AI governance. Yet many struggle with fragmented data landscapes, poor lineage tracking and compliance gaps. This webinar will explore how enterprise-grade data lineage can help capital markets participants ensure regulatory compliance with obligations such as BCBS 239, CCAR, IFRS 9, SEC requirements...

BLOG

Data Quality Posing Obstacles to AI Adoption and Other Processes, say Reports

The rush to build artificial intelligence applications has hit a wall of poor quality data and data complexity that’s hindering them from taking advantage of the technology. Those barriers are also preventing firms from upgrading other parts of their tech stacks. A slew of surveys and comments by researchers and vendors paint a picture of...

EVENT

RegTech Summit New York

Now in its 9th year, the RegTech Summit in New York will bring together the RegTech ecosystem to explore how the North American capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

AI in Capital Markets: Practical Insight for a Transforming Industry – Free Handbook

AI is no longer on the horizon – it’s embedded in the infrastructure of modern capital markets. But separating real impact from inflated promises requires a grounded, practical understanding. The AI in Capital Markets Handbook 2025 provides exactly that. Designed for data-driven professionals across the trade life-cycle, compliance, infrastructure, and strategy, this handbook goes beyond...