Banks rail against FASB netting proposals
Dealers say gross figures over-inflate balance sheet and misrepresent risk
Major dealers have strongly criticised a proposal by the Connecticut-based Financial Accounting Standards Board (FASB), which would make it much harder for US financial firms to present derivatives assets and liabilities on a net basis.
The proposal would add trillions of dollars to the balance sheets of financial institutions – an unnecessary measure that would misrepresent the risks to which they are exposed, dealers argue. FASB declined to comment on the matter.
"I do understand the concerns
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