There's a lot of sound and fury in the debate over mark to market accounting but we're probably over-estimating it's impact. The overwhelming majority of assets held by banks aren't subject to mark to market accounting.

David Reilly at Bloomberg breaks down the numbers and shows that only a minority of the $8.46 trillion in assets at financial firms are marked to market under current rules.

Only 29% of the assets at the 12 largest banks are marked to market.

At General Electric's financial subsidiary, just 2% are market to market.

Reilly explains why so much of what the banks hold isn't marked to market, despite the fact that they are producing losses.

What are all those other assets that aren’t marked to market prices? Mostly loans -- to homeowners, businesses and consumers.

Loans are held at their original cost, minus a reserve that banks create for potential future losses. Their value doesn’t fall in lockstep with drops in market prices.

Yet these loans still produce losses, thanks to the housing meltdown and recession. In fact, bank losses on unmarked loans are typically bigger than mark-to-market losses on securities like bonds backed by mortgages.

So before you get too worked up about how mark to market rules are crippling financial firms, keep in mind that we're only talking about a fraction of the assets. The most illiquid assets aren't marked to market prices right now. Much of this debate seems fueled by misinformation about the rules.