In the trading business model, reporting fair value focuses risk management on short-term price movements and in most cases incentivizes management to define the organization's risk appetite and to mitigate risk through hedging or other means. Fair value also incentivizes the entity to raise and maintain capital at a level sufficient to cover the price volatility of its assets.
The time has come for all of us to stop for a moment and remember pre-October 5th programmes and proclamations, and ask ourselves whether anything real is being done today or is this just a way to buy time!