From Mr John Grout.

Sir, Henry Maxey ("A subprime tale of silliness and irrational behaviour", July 12) is right to draw attention to the risks inherent in the practice of mark to model rather than mark to market. Tweaking the model or changing one key input can cause a big valuation swing. And if everyone does it, everyone is trying to adjust their portfolio at the same time. A recipe for instability.