Interest rates have an immediate impact on the price of corporate bonds.As the long run interest rates increase, bond prices decrease.Mark-to-market refers to the accounting practice whereby corporations are required to adjust the asset values of any bonds that they hold on their balance sheet to reflect market prices changes of the bonds.For banks this can be especially problematic since banks are required to maintain a minimum ratio of liquid assets to loans.When the asset value of the bonds decrease banks may be required to sell off other assets in order to maintain the minimum ratio.Banks argue that they should not be required to use mark-to-market accounting since the change in interest rates and subsequent decrease in price has no effect on the annual bond coupons or the final bond payment when the bond matures.TFU and explain: Using opportunity cost as the basis for analysis, mark-to-market should not be applied to bonds asset values on balance sheets