Mark-to-market: A BIS scheme that helped to set up the 2008 Global Financial Crisis

by Rhoda Wilson, Expose News:


The 2008 financial crisis, also known as the Global Financial Crisis, was a severe economic downturn that was triggered by a housing market bubble burst in the United States. The crisis began in 2007 and lasted for several years, affecting many countries around the world.

Widely referred to as ‘The Great Recession’, ordinary citizens worldwide felt the impact.  Millions of jobs were lost worldwide, with the global unemployment rate rising to over 8%. Millions of homes were foreclosed, leading to a surge in homelessness and a decline in housing values. Governments around the world accumulated significant debt to finance their commercial bank bailouts and stimulus packages, which much of the public interpreted as bankers being rewarded for recklessly tanking economies.


But was it caused by banks acting recklessly? In 2016, Mark Arnold found evidence that it was not.  He discovered that the Bank for International Settlements (“BIS”) imposed an accounting policy on US commercial banks only months before which helped set the world up for The Great Recession.

Mark Arnold has always had a keen interest in economics. In 2008/2009 he researched the cause of the 2008 sub-prime mortgage debacle leading up to the Global Financial Crisis and delved into the depths of collateralised debt obligations, credit default swaps, investment banks and bailouts. In early 2009 he published his findings in a manuscript entitled ‘Bailout is the Name of the Game’.  We were unable to find a copy of Arnold’s manuscript online.

In 2016, he published a series of articles on his website ‘From a Native Son’ about the unknown history of the BIS. You can read Part 1 HERE, Part 2 HERE, Part 3 HERE, and Part 4 HERE.  The following is adapted from the introduction to the series: ‘Hitler’s Bank: The Unknown Story Of The Bank For International Settlements – Introduction

While researching ‘Bailout is the Name of the Game’, among the various financial mechanisms he encountered was an accounting principle called “mark-to-market”.

Mark-to-market is an accounting valuation method used to determine the current market value of an asset or liability on a company’s balance sheet. It involves re-evaluating the value of an asset or liability that can fluctuate over time.  The aim is to provide a realistic appraisal of a company’s or institution’s current financial situation.  In the case of financial instruments, such as futures and mutual funds, this means they are re-valued and disclosed in financial accounts at current market value as opposed to showing them at the original transactional value.

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