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Banks fear $5 Trillion in off-book assets

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Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Per AccountancyToday:

Analysts at Citigroup warn the planned tightening of accounting rules for off-balance sheet vehicles would force US banks to reconsider arrangements and could result in up to $5 trillion of assets coming back on to their books.

This directly affects Debt-Equity ratios and can significantly affect the ability of a bank to lend, as they have to have a certain minimum of on-hand capital. This will further tighten credit.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Let it happen. It is because the regulators are not enforcing their own rules and standards that the $5 trillion off balance sheet came to be.
 

Kevin Little

Sophomore Member
Joined
May 25, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Truer words were never spoken.
 
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