First, there is no need for the Fed to mark to market since its assets are not held for trading and can easily be held to maturity or recovery if necessaryCuriously, he does not discuss what happens to his theory if it turns out some Fed assets are total junk and worthless. This could very well be the case. The Fed has still not told us all the collateral it loaned money out against during the financial crisis.
I hasten to add that this somewhat of an academic question, though, since the most important reason you need to know the value of assets on a balance sheet is to determine if they are greater than liabilities, to evaluate whether an organization will have the means to meet its obligations. This is not a problem with the Fed, since even if all its assets were worthless, it could still simply print new money to payoff its obligations.
That said, from a strictly accounting view, apparently one former Fed official thinks the Fed is near broke. McTeer reports on, but doesn't identify the official:
One such basher, a former Fed official who should know better, said on Cable TV that the Fed was broke or near broke because a rise in interest rates could easily wipe out the Fed’s capital if its assets were marked to market, which should be done in his opinion.Again, this is strictly an accounting situation, but mark to market could prove highly embarrassing to the Fed, not only because of an interest rate increase caused decline in asset value but it would also highlight the junk that Fed may have indeed bought and maintains on its balance sheet at full value, when it's true value is nowhere close.