Marking-to-market practices provide timely and relevant information on the state of financial firms under normal market conditions. Yet, they may also trigger negative feedback effects when markets are disrupted, as financial institutions may be required to sell assets into falling markets, exacerbating the asset price decline. Furthermore, accounting rules should support banks in building buffers during good times against future losses.
2  See Reinhart and Rogoff (2008, 2009) for a comprehensive overview of financial crises and their impact on real GDP.