A marked difference

While most loan portfolio managers typically view mark-to-market accounting as a potential millstone around their neck, Morgan Stanley's Frank Accetta sees it as an advantage, especially in the volatile credit environment. By Arielle Weliky

Morgan Stanley's loan book may not be the largest, but its modest size has facilitated a noteworthy approach to portfolio management. "One fundamental place where there is a significant difference in the way we do things is that we look at our portfolio as a trading book," says Frank Accetta, head of the loan portfolio group at Morgan Stanley in New York.

The bank marks its loans to market daily and argues that this allows it to better assess the overall risk in its portfolio and hedge