Interesting Bank Fix

I read the following article as a prosposed fix for the banks and I like the fundamental idea of it.

http://online.wsj.com/article/SB123388681675555343.html

The problems, I see, in trying to solve the banking crisis this way is that, while these banks would try to lend, the lending standards would be so strict that few would want to borrow. In fact lending is down significantly for that reason and for the reason of how companies and individuals always operate during major economic downturns.

During major downturns companies and individuals "clean house" in a way. They save more, they clean out inventory (I know that inventory is what kept GDP from dropping even lower in the 4th quarter but that wasn't a good thing), and individuals clean up their debt to asset ratios. This is a good thing, but it causes major economic problems. In all, they don't borrow more, they don't spend more and they take a while before they get back into it.

Personally I am for a review of mark-to-market accounting and maybe even a "holiday" of sorts from those accounting practices. That could stop this perpetuating cycle of asset and credit destruction without having to create more major government entry to the private sector.