Mark-To-Market Accounting For Banks And Thrifts - Lessons From The Danish Experience

*University of Michigan; tHarvard University. We appreciate helpful suggestions received from participants at the Stanford Summer Camp and the Price Waterhouse Symposium; workshop participants at the University of Chicago, Cornell University, Indiana University, The Ohio State University, University of Michigan, University of Pittsburgh, University of Rochester, University of Southern California, Tulane University, and University of Utah; Mary Barth, Bill Beaver, George Benston, Allen Berger, Fisher Black, Paul Healy, Jack Hughes, Robert Kaplan, Richard Leftwich, Jim Leisenring, Niels Nielsen, Finn Ostrup, Bob Ruland, Pete Wilson, and an anonymous referee. We also appreciate the assistance of our contacts in Denmark, who shared their time and expertise with us so willingly. These include Mr. Ole Bjarrum and Mr. Lars Nielsen of Nykredit, Mr. Jesper Jesperson and Mr. Aksel Olsen of KPMG Revisionsfirmaet C. Jespersen, Mr. Lars Tonnesen and Mr. Birger Schmidt of the Danish Bankers Association, Mr. Kim Hartvig-Olsen of the Danish Financial SupervisoryAuthority, Mr. Jorgen Kock of Den Danske Bank, and Professors Jens Elling, Merete Christiansen, Finn Ostrup, and Niels Nielson of the Copenhagen Business School. We thank Professors Dwight Crane and Bob Kaplan of the Harvard Business School, and Bob Swieringa and Jim Leisenring of the Financial Accounting Standards Board for help in conducting this research. We are grateful for financial statement data furnished by the Danish Financial Supervisory Authority, for access to the Account Database provided by Professors Elling and Christensen of the Copenhagen Business School, and for excellent research assistance by Elizabeth Andersen, Christine Botosan, Marlene Plumlee, and James Myers. We also appreciate the willingness