About a year ago (March 12, 2009) the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Entities held a hearing titled “Mark-to-Market Accounting: Practices and Implications.”  The Committee members directed several hours of fairly hostile questioning to FASB Chairman Bob Herz and SEC Chief Accountant Jim Kroeker.  If you have not seen this, the archive is still available.
During the session, several Representatives quoted complaints from some Federal Home Loan Banks that their mark-to-market losses were large, but this was due to illiquidity.  The banks claimed that they would realize very small actual losses on their portfolios.
Someone sent me an article by Jonathan Weil (Bloomberg, Feb 25) where he takes a look at those banks some 9 months later.  One bank who claimed the mark-to-market losses were fictional is now suing 11 Wall Street underwriters to recover its losses.  As Jonathan says “You know the losses are real when the bank is suing to get its money back.”  He ultimately concludes that the Committee hearings were based on a faulty premise, and asks that the FASB reconsider the guidance it issued in response to the political pressure.

I use segments of the House testimony in my class to provide a vivid example of political pressure in standard setting.  I think the Weil article will add a nice follow up to this example.
By the way, all of this is related to the Roundtable for tomorrow on the predictivability of fair value.