Mark to Market accounting was ushered in in the 1980's as a solution to the failings of the Savings and Loan Crisis. A few of these big S+L's kept the regulators at bay by carrying big assets (think the Pheonician Hotel) on their books for substantially more than their actual market value, due to inflated appraisals.
We find ourselves with the inverse problem today. Banks are having to mark down assets in an uncertain market and thereby being forced to mark them to where the market is today, in a crisis climate. This process becomes a self fulfilling prophecy as it affects other assets in the class as the market spirals lower. Few buyers know where to enter a downward spiraling market.
I think we need a time-out!! If FASB or the regulators could agree on a temporary, two year time out from Mark to Market Accounting; the market would get a breather as banks would not be writing all of these assets down to artificially low levels. The two year time out could be re-visited and reinstated when the market returns to a more normalized pattern.