Category Archives: Accounting

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Shadow banking, part 2: Lack of shadow master plan means impact of new rules is uncertain

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The shape of shadow banking reform is now clear. Congress and regulators are going to put a bunch of new rules in place, but they’re not going to articulate a coherent vision of what shadow banking should, or should not, … Continue reading

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News round-up: Turmoil in shadow banking

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RepoWatch recommends the following reports. Search for the topics that interest you: Accounting, Collateral, DataWatch, Finding a fix, International repo, Money market funds, Securities lending, Securitization, Shadow banking, and Tri-party repo. Items are arranged chronologically, within topics that are listed alphabetically. … Continue reading

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Black: Why CEOs haven’t been busted

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“Unless you imprison the fraudsters, sophisticated financial scams grow ever more destructive. It seems as if we have forgotten this lesson,” writes William K. Black for Bloomberg News May 10 in an article headlined “Why CEOs avoided getting busted in … Continue reading

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Accountants failed again in the financial crisis

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A U.S. Senate subcommittee held a hearing April 6 on “The role of the accounting profession in preventing another financial crisis,” and hardly anyone paid attention, probably because no one believes accountants are financial watchdogs anymore. Certainly they don’t seem … Continue reading

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FASB proposal to report more repo detail

Reporting on repurchase agreements could get more accurate under a proposal from U.S. and European accounting boards that would require more detailed disclosure. Currently U.S. companies can net repo borrowing with repo lending and report only the difference, when the … Continue reading

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Accounting for repo

Following on Tom Selling’s post at the Accounting Onion yesterday, Lynn E. Turner, former SEC chief accountant, offers the following explanation for the key problems with repo accounting: I have dealt with accounting for and auditing of repo’s now for three … Continue reading

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Accounting Onion faults FCIC report

Accounting Onion, Tom Selling’s blog, today criticizes the Financial Crisis Inquiry Commission report for failing to hold the accounting profession accountable for its role in the crisis. We are left to conclude that either: (a) the commission couldn’t bring itself … Continue reading

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Accountants spar over Repo 105

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CPA Tom Selling at Accounting Onion does not think much of the Financial Accounting Standards Board’s proposal to solve the Repo 105 sleight of hand. Lehman Brothers made Repo 105 famous when the bankruptcy receiver discovered Lehman was using a … Continue reading

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Accounting rules helped Lehman hide its shaky condition

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CPA Tom Selling thinks the House Financial Services Committee should examine whether the Financial Accounting Standards Board bears any responsibility for the economic damages caused by accounting rules he says allowed Lehman Brothers to misrepresent its financial condition. From his … Continue reading

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“Someone needs to tame repo on Wall Street”

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Peter Eavis, who often has insights on banking in the Wall Street Journal feature Heard on the Street, has this to say March 12, about the repurchase market: The dark irony of all this is that banks have long argued that repo … Continue reading

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Securitization accounting is “gimmickry”

The Accounting Onion would like Financial Accounting Standards Board Statement 140 to be wiped off the face of the earth. He calls it, “that bric-a-brac of off-balance sheet accounting gimmickry.” Statement 140 is the ruling in 2000 that established how companies … Continue reading

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Repos were hot … back in 1979

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Think repos are new? Check out this September 1979 article from the Federal Reserve Bank in St. Louis by Norman N. Bowsher. Even then, repos were popular. From the report: The market for repos has increased dramatically in the past … Continue reading