Leon Gettler wrote in a recent article: As former analyst Henry Blodget points out, the US is adopting the model used by Japan in the 1990s when it refused to acknowledge its banks were insolvent and pretended they were healthy. History, as Mark Twain said, does not repeat itself, but it rhymes. The G20, banks and standard setters should remember this: to borrow from Winston Churchill's line on democracy, fair value is the worst [form of accounting except for all the other forms that have been tried].1109

(a) Does fair value convey 'reality' better than any other form of valuation?

(b) Is it better for banks to report stable asset values or to provide information about those assets? What are the arguments for each view?

AppendixLO1