US banking groups are once again lobbying authorities to suspend the use of fair value accounting rules which they because it requires them to record losses they don't expect to incur.

'We are suggesting that the SEC issue a temporary order to negate the negative impact,' said Scott Talbot, senior vice president of government affairs at the Washington-based Financial Services Roundtable.

The president of the American Bankers Association further described the fair value rule as 'a complete disaster'.

'It forced assets to be written down to fire-sale prices, which is well below what they're really worth, in a never-ending downward spiral,' said Yingling.

American International Group has added its voice to the call, while Citigroup is concerned that that assets sold in the Treasury's $700 billion plan to avert further financial losses may establish extremely low prices that companies would have to use a reference point in complying with fair value.

According to Bloomberg, financial service companies reported more than $520 billion in writedowns and credit losses since last year.

However supporters of the rule argue that companies who want to suspend the rule may be seeking ways of covering their poor performances.

The US Financial Accounting Standards Board, which wrote the rule, declined to comment on the issue.

A FASB spokesman said the board is ' 'hoping to soon have details of the federal bailout plan'.

'Until then we can't really say much,' the spokesman said.

Further reading:

Moulton slams 'absurd' accounting for banks' crisis

Fair Value overhaul rejected by IASB body