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04 Jun 2008
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 (₤2.5 trillion) of assets coming back on to their books.
‘We think it is very likely that these vehicles will come back on balance sheet.’ Birgit Specht, head of securitisation analysis at Citigroup, told Financial Times.
‘This will not affect liquidity because [they] are funded, but it will affect debt-to-equity ratios [at banks] and so significantly impact banks’ ability to lend.’
Specht told a seminar on asset-backed securities in Cannes the uncertainty about the change was making banks concerned about their investments. ‘Banks are not investing [in assets] right now because of funding issues and regulatory uncertainty,’ he said.
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Briefings
By looking at the reasons supplier statements became unfashionable, and the reasons why it is different today, this paper delves into the many benefits that can be obtained by automating the process.
Having a real and true view of your organisation’s current financial position, and having the right systems and processes in place, will ensure that you can make strong choices and are ready to capitalise on opportunities
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Visitor comments Add your comment
BOOM! KAPOW!
Yowzer!
Would have been a good idea a few years ago.
Surely this will completely destroy some banks capital adequacy ratios?
If it happens this will have a massive impact on the amount banks can lend and therefore erode asset values.
Good. Everythings too expensive anyway.
Posted by: Geevna, 04 Jun 2008 | 00:00
US Banks Fear 5 Trillion
Just think if American businesses used the govt's and banking industry accounting methods. We'd be broke and in jail....just as govt and banksters should be. I guess it helps to be in charge of making laws
Posted by: robertsgt40, 05 Jun 2008 | 00:00
Fear the $5 Trillion??
The bankers should be fearing the people/countries these asset backed securities were originally sold to. These asset backed securities are unregulated and uncollectable to say the least. The bankers knew what they were doing when they created this fiasco. Dark days ahead for certain
Posted by: JB Slear, 05 Jun 2008 | 00:00