Fed Chairman Bernanke says systemically important institutions will not be allowed to fail in an address that focuses on financial regulation. The most interesting kernel is a line suggesting he is open to amending mark-to-market accounting rules given their “pro-cyclicality”. Essentially the rules forces banks to sell or mark down assets when times are bad, driving prices ever lower.

Ban stocks would be enormous beneficiaries if mark-to-market rules were suspended.

EUR/USD is just below resistance at the 1.2805/10 level.

UPDATE: Bernanke later clarified his remarks on mark-to-market saying he is opposed to their suspention but would like to identify weak points and make improvements and give guidane to banks so that they can beeter value hard-to-value, illiquid assets.