There is enough wiggle room in the accounting rules for banks not to be bound by this price level but the news from Merrill signals the likelihood of more fair-value losses to come.
With no designated framework to release the funds, the process of decision-making will be subjective and will be bound to come under intense public scrutiny, given thelevel of public anger at the last round of injections into the banking system.
They are doing their level best to do the best for their students and they are bound, given the pressures they are under, to take the most optimistic view.