Volcker Rule Blame Game Begins - Jonathan Weil

``The losses aren't new. Zions just didn't have to recognize them before because of the way the accounting rules let companies report their bond holdings. Zions had been classifying the CDOs as "held to maturity," which let it avoid recognizing the decline in value as part of its earnings. Now that Zions no longer has the ability to hold them to maturity, the bank said it will relabel the CDOs as "available for sale" and write them down to their fair-market values, triggering the earnings hit... The simpler, more informative approach would be to have only one category and require companies to mark their securities to market values, with changes flowing through earnings each quarter. Of course, a lot of companies like maintaining the fiction because it makes their numbers look so much better.''