The Financial Accounting Standards Board approved major changes to its mark-to-market rules that could allow banks to reverse some of the writedowns they have taken on MBS and report an increase in earnings and capital for the first quarter.

Under pressure from Congress and the banking industry, FASB clarified its "other than temporary impairment" guidance so banks don't have report the entire estimated impairment as a loss on the income statement. Institutions would report only credit losses in income, provided they don't expect to sell the MBS until there is an economic recovery.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.