In a comment letter filed today, the U.S. Securities Industry Association’s Risk Management Committee urged the Basle Committee on Banking Supervision to grant greater regulatory recognition of the benefits of marking-to-market as a means of strengthening the new accord.

The committee’s letter encourages financial regulators to grant greater recognition to the benefits of marking-to-market by clarifying that the capital rules under the current accord’s “market risk amendment” apply to all products subject to mark-to-market accounting, where the mark-to-market incorporates the pricing of the credit risk inherent in the position.

“Mark-to-market accounting is a key tool that strengthens market discipline, supports appropriate capital allocation, and facilitates the integration of market and credit risk,” said Patrick de Saint-Aignan, risk manager and managing director of Morgan Stanley.

“We welcome the decision of the Basle Committee to propose a global regulatory capital standard that encourages market discipline and appropriate capital allocation. The new accord offers real benefits to both financial institutions and the marketplace as a whole,” said Bob Litzenberger, chairman of SIA’s Risk Management Committee and risk manager and managing director of Goldman Sachs Group, Inc.