What Were They Thinking?

As a result of the credit crisis and the ensuing economic crisis, no one has been spared blame for creating this debacle. Fingers were pointed at the investment bankers who created the insidious financial products as well as the accountants who exacerbated the problem with their mark to market rules. Initially, we were sympathetic to the accounting profession as the effects of their ruling were unintentional and unforeseen. Moreover, we believed that they had learned their lesson from Enron and had strict guidelines in place from Sarbanes-Oxley. From that perspective, we can report both good news and bad news. The following quote discussing “own credit” is extracted from Barclays PLC’s Interim Management Statement dated October 31, 2008:

“The carrying amount of issued notes that are designated under the IAS

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