either 2 ways fair value or hold-to-maturity value. Fair value uses mark-to-market accounting. However it is hard to determine a real market price, so a mark-to-model approach must be used. Current the government should step in and establish a program to create a real market price and terms for the sale of toxic assets. Rather than use any modeling for valuation, the program should set discounts from the accounting value. Upon their sale to the government existing shareholders would adsorb the loss taken on the discount and that loss of common stock value would be replace by converting Trouble asset relief program preferred stock. Under this approach the banks can determine which assets to sell to the government, base on its posted terms and conditions. In the meanwhile government can avoid overpaying by increasing ownership of common stocks. At the market stabilize, the costs of TARP can gain through selling the private hands in long run.
If government wants the banking industry to move swiftly to get rid of bad assets and to avoid the likelihood of even greater pain down the road such full-blown nationalizations, it should make everyone a winner.
年龄: 45
