In corporate bond markets, spreads have been widening on both investment- and speculative-grade issues. Lenders are demanding much higher risk premiums for commercial real estate loans. And equity prices have fallen substantially over the past seven months, reducing household wealth and increasing the cost of raising equity capital for businesses.
As the recent financial crisis has shown us, a financial instrument's fair value can vary widely among entities in similar markets. And the existence of wide variability in valuation models makes comparisons between entities difficult if not suspect. The reliability of amortized cost is not as questionable.