David Henderson quotes Isaac to the effect that we would have had thousands of bank failures under market value accounting in the 1980's. That is wrong. If market value accounting had been in place in the 1970's, we would not have had a banking crisis. The first banks to get into trouble would have been shut down in a timely fashion much sooner, and the rest would have taken steps to protect their franchises. It was because we did not have market value accounting that so many banks and savings and loans took excessive risks that were borne by the taxpayer.
Historical-value accounting was an invitation to bankers to loot. Of course, what we are seeing today is that looting is encouraged by the political process in general. After all, it's not the politicians' money that is being looted. See this post (or almost any post) by Simon Johnson.