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BNP Paribas and fair value accounting

with 9 comments

On Monday, I commented on an article from Wellington Financial on fair value accounting. This morning they’ve written another article related to BNP Paribas:

BNP Paribas plays the canary role

Fair value accounting might make sense in a time of high liquidity, but what do you do when liquidity dries up? I’m no expert, so the accounting provisions might be suitably flexible to accommodate liquidity events, but it seems like a pretty significant challenge to me. What is the fair value when there are no buyers?

Written by Eric

August 9, 2007 at 9:23 am