RegulationAccounting StandardsUS banks fear $5 trillion balance impact

US banks fear $5 trillion balance impact

US banks fear accounting changes could impact lending as they force $5 trillion of assets back on to their balance sheets

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.

Further reading:

IIF backtracks on fair value view

Read
the Financial Times story

Related Articles

Demystifying GDPR for accountants

Accounting Standards Demystifying GDPR for accountants

2w Ellen Temperton, Lewis Silkin
EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2m Emma Smith, Managing Editor
The great professional services shake-up

Accounting Standards The great professional services shake-up

3m Fergus Payne, Lewis Silkin
What do clients actually want from an accountant?

Accounting Standards What do clients actually want from an accountant?

4m Emma Smith, Managing Editor
Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

Accounting Standards Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

4m Alison Conley
Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

5m Alia Shoaib, Reporter
The real price of mates' rates in the provision of professional services

Accounting Standards The real price of mates' rates in the provision of professional services

5m DAC Beachcroft
IASB overhauls insurance accounting with issuance of IFRS 17

Accounting Standards IASB overhauls insurance accounting with issuance of IFRS 17

7m Alia Shoaib, Reporter