Fair-value accounting was not the culprit of the financial meltdown that has brought down the biggest financial institutions in the country, the U.S. Securities and Exchange Commission said today in a report to Congress.

This method of accounting, where assets are valued at a calculated current market price, should remain the standard, the S.E.C. said, adding recommendations to strengthen accountability and sensitivity to market changes.

The study, produced on more than 200 pages, was ordered as part of Congress' $700 billion bailout package.

Many banks and industry organizations have blamed this accounting practice for the downward economic spiral, as it forces businesses to assign a low value to assets as they would trade today, even if the company doesn't intend to sell them.

Critics have also charged that it is impossible to determine fair market value in an illiquid market, such as the one that began to materialize after the risky trading of mortgage backed securities reversed course.

The S.E.C. said it entertained all such concerns and cited several others which, the agency's paper said, likened the notion of suspending fair value accounting to " 'shooting the messenger' and hiding from capital providers the true economic condition of a financial institution."

The report described the recent economic souring like this:

"Rather than a crisis precipitated by fair value accounting, the crisis was a 'run on the bank' at certain institutions, manifesting itself in counterparties reducing or eliminating the various credit and other risk exposures they had to each firm.

"This was, in part, the result of the massive de-leveraging of balance sheets by market participants and reduced appetite for risk as margin calls increased, putting enormous pressure on asset prices and creating a 'self-reinforcing downward spiral of higher haircuts, forced sales, lower prices, higher volatility, and still lower prices.'

"The trust and confidence that counterparties require in one another in order to lend, trade, or engage in similar risk-based transactions evaporated to varying degrees for each firm very quickly. What would have been more than sufficient in previous stressful periods was insufficient in more extreme times."