RegulationAccounting StandardsUS banks’ $5,000bn balance sheet burden on ice

US banks' $5,000bn balance sheet burden on ice

US standard setters postpone the introduction of new rules which will force banks to bring more of their debt assets onto the balance sheet for a year

Rulemakers in the US have decided to shelve accounting rule changes that
would have seen banks forced to bring up to $5,000bn (£2.5bn) of debt assets
onto the books.

The Financial Accounting Standards Board said that institutions will now not
have to bring more of these holdings onto the balance sheet until January 2010,
one year later than originally scheduled.

Concerns
have been raised recently
that the move would force banks to compensate for
the extra liabilities by raising new capital in the middle of a tough economic
climate.

Bob Herz, chairman of FASB told
the
FT
: ‘It does pain me to allow something that has been abused by certain
folks to let that go on for another year.’

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