Banks Plotting a Coup Against the Only Sherriff Left in Town - FASB

It seems that looting the U.S. taxpayer was not enough for the U.S. banks. Heck why stop half way, when you can go for full power grab. How about getting rid of FASB the only semi-independent body that sets accounting rules? Would'nt it be so...oo much better if banks wrote the accounting rules themselves? After all, it was not their bad loans or crazy derivative products that brought down the world's financial system. Duh! That was the fault of silly accounting rules such as mark to market. So now that we as a country have decided to head down the path of lawlessness (err...we mean financial reform), why not toss out the one and only sherriff left in town - FASB?

The Huffington Post is reporting that a civil war is breaking out in corporate america - banks are battling the Chamber of Commerce over accounting rules

Amid the ongoing financial regulation overhaul, the banking industry is hoping to pull off a quiet power grab that has eluded its grasp since the Great Depression, by stripping the independence of the board that sets financial accounting standards. The move could effectively let banks set their own accounting standards in rough economic times. The banks are trying to get Congress to agree that the next time there's a big downturn, they should have the ability to alter their accounting standards -- essentially, fudge the numbers -- so that the public and investors won't be able to tell how insolvent they really are.

The mechanism is contained in an amendment set to be introduced in mid-November by Rep. Ed Perlmutter (D-Colo.) that would move final authority over the Financial Accounting Standards Board (FASB) from the Securities and Exchange Commission to a new body, a so-called "oversight" board, that would include the officials charged with managing systemic risks to the financial markets.

These regulators would have the authority to override FASB's accounting guidelines by taking into account economic conditions.

The move is so radical that it has split corporate America. The bankers and members of Congress who support it have earned themselves an unlikely enemy: the U.S. Chamber of Commerce. "Washington isn't thinking straight," said Josh Rosner, managing director of Graham, Fischer & Co, a New York-based financial analyst who advises regulators and institutional investors. "Financial statements are for the benefit of investors."

Indeed, allowing banks to alter accounting standards when they run into trouble is incentive to take more risk and, in essence, institutionalizes fraud. The regulators would now be under enormous political pressure -- and sometimes under direct orders -- to allow banks to remain in business long after they've become insolvent, in the hopes that things will turn around and they'll grow again.

And rather than stabilize the system, removing accounting independence destabilizes it in the long run, as investors and other banks have little confidence in the veracity of financial statements.

That the banking industry finds itself in opposition to large sectors of the business community is evidence that a historic power struggle for control of the economy is underway.

Now that the banks have Congress in their pocket, the keys to the U.S. Treasury and the Fed, it is time to complete the picture and make Lloyd Blankefein the President of U.S.A. And folks instead of sending your taxes to the IRS why not save time and just mail them directly to Goldman Sachs.