Your questions are answered by a previous Mahalo Answers question:

"Mark to market is an unnecessary regulation on business and has arguably exacerbated the effect of toxic assets upon the current financial downturn. Relaxing mark to market rules will allow businesses to engage in long term planning without having to worry too much about assets that may happen to be low value at today's market prices. This could help increase liquidity, which is one of the biggest problems at the moment (hence many of the bailouts). With liquidity on the rise, businesses would begin to recover and investors would start to see profits again. This would cause confidence in the market to be restored, which would help homeowners. So everyone benefits, really."

"Mark to Market is a mixed bag—one that I think I can see good rationale for, but which seems to have crippled the financial sector in the current economic crisis. Essentially the problem as I understand it is that by forcing banks to keep their balance sheets according to the liquidation prices, they are currently hamstrung in getting out of the financial crisis because the liquidation price of toxic assets is essentially zero. While in a well-functioning market, it would seem that mark to market rules have a place, albeit perhaps a limited one, in keeping banks accountable, in the current market they are preventing liquidity in banks that have toxic assets, in essence assuring that the toxic assets will remain valueless by keeping them from being dealt with. Toxic assets need to be allowed to regain value in some way, and relaxing mark to market rules, at least temporarily, should allow banks the freedom (i.e. capital) to find a way to deal with them effectively. "
Source(s):
http://www.mahalo.com/answers/money/who-will-profit-from-mark-to-market-cha... and @daigakuinsei


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