It used to be that banks were allowed to 'smooth' profits, by increasing provisions for future losses during the good years, and reducing them in the bad. Assets were largely valued on an accrual basis rather than fair or market value.
International Financial Reporting Standards all but brought an end to this from 2005. For banks, the revolution was the concept of fair value accounting for a far broader set of assets. The sweetener was that the adoption coincided with increasing asset values. The three new categories of assets - hold to maturity, available for sale and trading - saw the latter two valuing assets at market prices. At the time, there were solid philosophical arguments in favour of banks being assessed on a 'truer' market value of assets basis. Transparency may optically have improved, but comparability was still blurred by different asset categorisations.