Next Bubble To Burst Is Bank's Big Loan Values

[Parsad]

Jonathan Weil has a good article on new fair value footnotes by financial institutions.  Not quite a bubble as he says, but certainly some banks could be required to increase capital.  Cheers!

 

http://www.bloomberg.com/apps/news?pid=20601039&sid=a04oVutXQybk

[Rabbitisrich]

This proposal by FASB introduces an unnecessary amount of volatility. I'm not looking forward to having to adjust for years of impairments and true-ups on an increasingly opaque income statement. FASB must be a fan of the monoline insurers.

 

The Hold to Maturity standard is fine, IMO. If a bank makes a clear statement that it has the intention and the ability to keep a loan on its books, then I can make my own judgement about the viability of the loan.

 

Does FASB coordinate with regulatory officials at all?

[Guest Broxburnboy]

The small banks aren't out of the woods either:

 

August COP report:

 

Small banks need to raise significantly more capital to backstop bad loans:

 

 

http://seekingalpha.com/article/155416-congressional-oversight-panel-august-report-small-banks-need-to-raise-yet-more-capital

[SharperDingaan]

 

Rabbit

 

The whole world is going to IFRS & like it or not the US will be forced to as well. There will be a lot of screaming & posturing - but it will happen.

 

The MTM is really no different to what allready occurrs, just that now it goes on the face of the FS wheras before you did your own calculation on a spreadsheet. We're better off for the standardized disclosure, & shining the light in what is often a very dirty area.

 

SD