New accounting rules that take effect April 1 require the banks to begin valuing their stockholdings at market prices.
The American Express shares being offered are valued at $350 million at current market prices.
They do not even value it at market prices: the official value is $42.22 an ounce, the price set in 1973.
The standard provisions would have seen all shareholdings valued at market prices with the party with the higher value paying the other party the difference.
The Government contends that if Lincoln's assets were valued at current market prices, the institution would be woefully insolvent - to the tune of more than $2 billion.
'More Disclosure' Needed Securities held by banks in trading accounts are already valued at market prices, and their fluctuations are part of a bank's earnings.
Borrowed metal is valued at market prices at the balance sheet date.
The rule changes require that banks value their stock holdings at current market prices instead of the prices they paid for the securities, a practice known as mark to market.
The Government assessed the bank's problem loans at book value, while Newbridge valued them at depressed market prices.
Bonds, small stakes in companies and Federal Government holdings of foreign currencies were valued at current market prices.
