The trouble with throwing a lifeline to dying banks is they keep trying to pull the rest of us into the drink.

Here we have the Treasury Department injecting $250 billion of fresh capital into US banks in exchange for preferred stock, which should present the perfect opportunity for them to sell or write down all their toxic holdings.

And how do the banks return the favour? By trying even harder to gut the rules that say they can't lie to investors about the values of their crummy assets.

What investors need now is a good reason to believe corporate balance sheets. Otherwise, it won't matter how much taxpayer money gets pumped into ailing financial institutions. We'll still be risking systemic meltdown because nobody, especially the banks, will be able to trust anyone else's books.

Yet that's where the banking industry and its lobbyists keep taking us. They want government blessing to value their assets any way they want, using whatever numbers they desire. And the banks will fight to their deaths to get it. Here's just the latest sampling of the accounting wars:

• On October 13, the London-based International Accounting Standards Board, which sets rules for companies in more than 100 countries, decided to import the worst of US generally accepted accounting principles in an effort to appease European banks.

Effective immediately, companies using IASB rules can stop marking their securities and loans to market each quarter. All they have to do is shift the items on their balance sheets out of the fair-value category and into a different classification.

Under US GAAP, this is permitted only in rare circumstances. The IASB redefined rare to include anything related to the credit crisis. The effect will be to let companies delay recognising future losses.

The move came after the European Union threatened to override the London board's rules legislatively. One counter effect: This could end up sabotaging the Securities and Exchange Commission's efforts to ditch US GAAP and force IASB standards upon US companies. After all, if the IASB rules are just as noxious and politicised, why switch?

• Also on October 13, the American Bankers Association sent a letter to SEC Chairman Christopher Cox, demanding that the commission override the US Financial Accounting Standards Board's latest guidance on fair-value accounting.

Four days earlier, in a letter to the FASB, the ABA had agreed that companies should include liquidity risk when determining the fair value of an asset for which there's no active market. Then for some reason — maybe it dawned on them how much this would hurt banks' earnings — the bankers changed positions.

In its latest letter, the ABA said including liquidity risk in fair-value measurements is bad, because it "brings the guidance full circle back to distressed sale values". The problem with that line is it isn't true.

When Warren Buffett agreed to invest in General Electric Co. and Goldman Sachs Group Inc. recently, he bought his stakes at a discount to market prices. In doing so, he got a liquidity-risk premium. That is, he negotiated a price that compensated him for buying an asset that was difficult to sell under the market conditions at the time.

Buffett was a willing buyer. And GE and Goldman were willing sellers. Those weren't distressed sales. They were orderly transactions.

We might not have to worry about the SEC giving the bankers a pass on this point, except for what it did the next day.

• On October 14, the SEC's chief accountant, Conrad Hewitt, kneecapped the big auditing firms, which had taken a unified stand on when to require write-downs of so-called perpetual preferred securities.

In a September 18 letter by their trade group, the Center for Audit Quality, the accounting firms said these securities should be treated as equity, because the owners can't force companies that sold them to pay back their original investments. The way the FASB's rules are written, that would make it more difficult for companies to dodge write-downs by positing that the securities had suffered only "temporary" declines in value.

Hewitt, in an October 14 letter to the FASB, sided with the ABA, saying such holdings could be treated as debt when checking if write-downs are needed, even though the securities are treated as equity on the balance sheet. That lets companies stretch the meaning of temporary further into the future, and postpone losses, as long as the credit of the outfits that sold the securities hasn't deteriorated.

So here you have the auditors trying to take a tough stand, and the regulator sides with the banks anyway.

If all this leaves you wondering who's protecting investors, join the club. Even when the watchdogs try to do the right thing, they risk getting run over by some industry shill.

The longer it keeps up, the more it will dawn on investors how rigged the whole game is. This is no way to inspire confidence.

Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.