Mark-to-Make-Believe Perfumes Rotten Bank Loans: Jonathan Weil

Just when it looked like U.S. banks were starting to reveal the true values of their loans, it turns out there’s an accounting loophole they can exploit to keep bad news buried.

Ever since new rules took effect last year, lenders have been required to disclose the “fair value” of their loans each quarter. The results have been something of a mystery, though. Some banks show large disparities between these numbers and the loan values on their balance sheets. Others don’t.