Suspension of Mark to Market Rules Nonsense

If you own an asset, you are typically interested in what it is worth. That is why you mark it to market as best as you can. Apparently, the logic behind the proposal to suspend mark to market rules for the banks is that they should not have to mark to market assets that they think will eventually go up in value.

In other words, if the assets they are sitting on decline farther in value, they don't have to tell us. The idea is that the market is wrong, and so market can simply be ignored until it corrects itself.

The obvious flaw with this argument is that we have no reason to believe that the market is wrong or that it will ever "correct" itself. Suppose that the mark to market rules are suspended for a period of two years. Further suppose that the banks mark their assets higher than the market. If in the two year period the marked does not right itself, the banks will have to realize the loss.