“Derivatives, like loans, carry risk,” said Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp.”To recognize those bets on the balance sheet would give a better picture of the risk exposures that are there.”
U.S. accounting rules allow banks to record a smaller portion of their derivatives than European peers and keep most mortgage-linked bonds off their books. That can underestimate the risks firms face and affect how much capital they need.
Bank risks bigger than they appear
Most Popular Articles
Latest Articles
New HUD rule aims to increase lender participation in tribal housing program
HUD says the new rule is designed to increase and streamline Native American borrowers’ access to homeownership.