(Fortune Magazine) -- Mark to market is a business rarity - an accounting term that draws reactions from people who don't know spreadsheets from bedsheets.  Mark to market, which we'll call MTM, evokes images of Enron's made-up profits and the other corporate scandals that marred the first years of this decade.  Not pretty. 

Now MTM - which means valuing marketable securities at market prices - is a hot item again, but for the opposite reason.  This time financial companies and their allies are claiming it's too strict.  They argue that marking the value of complex, illiquid securities to artificially low market prices has unnecessarily crippled the U.S. and world financial systems by creating billions of illusory losses on perfectly fine (albeit illiquid) securities, such as collateralized debt obligations linked to mortgages.  Markets for these things, the argument goes, are depressed way below true economic value. 

Accountants argue that MTM - known formally as Financial Accounting Standard 157 - is fine, although the Financial Accounting Standards Board has agreed to tweak it some. ( Don't ask me for details - the written arguments on this are so sleep-inducing they could be marketed as an Ambien alternative.) 

This week, the Securities and Exchange Commission is scheduled to hold a high-profile public meeting about MTM.  The SEC, which has the power to overrule FASB, is holding the meeting because Section 133 of the $700 billion bailout bill requires that it study MTM and report to Congress by late December. 

The guy who got 133 into the bill, Representative Spencer Bachus (R-Alabama), the ranking minority member of the House Banking Committee, told me he wasn't trying to politicize accounting. " It just says, 'Study it,'" he told me. " It doesn't say [to do] a study to repeal it.  It doesn't say [to do] a study to suspend it." 

But given that it's finger-pointing time both in Washington and on Wall Street, it's not going to be easy for the SEC to leave mark to market strictly alone.  In this environment what regulator dares run the risk of being held responsible for not doing something that would supposedly mitigate the world's credit crunch?  Would you want to find yourself accused of failing to act if the financial world totally melted down, as it has occasionally seemed about to do? 

Normal accounting is being overridden to help banks in various ways.  In early October, for instance, federal financial regulators jointly ruled that the $125 billion of preferred stock the Treasury is buying from nine big banks will be treated as tier-one capital (the best kind), even though it normally wouldn't qualify. 

Second, in a little-noted move, regulators allowed banks with losses on some Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) securities to treat the resulting tax savings as tier one in their regulatory statements for the third quarter.  That's strange, given that the third quarter ended Sept. 30, as usual, but legislation making this tax break usable didn't become law until Oct. 3.  How often has my source for this nugget - accounting guru Robert Willens of Robert Willens LLC - seen such grandfathering in his 40-year career? " Never," he says. 

Of course, this is more about optics than economics.  As is mark to market, in my humble opinion.  Credit markets have been frozen much of the past 15 months largely because banks haven't trusted the balance sheets of other banks and have thus been afraid to lend to them.  I can't imagine that confidence problem being resolved by changing MTM. 

There are problems with MTM: It's relatively new, and parts of it seem arbitrary.  But its problems have been exaggerated.  It's easier to blame accountants for your problems than to admit you made your institution vulnerable by overleveraging its balance sheet and buying securities you didn't understand.  Ironically, many of today's whiners adopted MTM a year before they had to, partly because of an arcane provision that let them count as profit the decline in the market value of their publicly traded debt. 

The bottom line: Despite MTM's flaws, blaming it for the world's financial problems isn't the answer.  Neither is shooting the messenger - or, in this case, the accountant.