Is the government now helping banks hide bad credits?

You scratch my back; I’ll scratch yours.  The Securities & Exchange Commission has announced it is changing the rules for the banks’ reporting of bad/questionable debt instruments.  As Bloomberg reports, this amounts to letting banks out of certain arcane accounting rules with the result that they do not have to reflect the full extent of the damaged credit on their balance sheets:  http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=aPSScH5rRBLM 

This is known as putting lipstick on a pig.  Query why then did the FBI announce a criminal investigation relating to the subprime mess:  just to make it look as if the government is going after the source of the problem, while behind the scenes doing what it can to make sure the banks will be a-okay?

Advertisements

One response to “Is the government now helping banks hide bad credits?

  1. Pingback: Investment Bankers » Blog Archive » High court rejects investors' suit against Enron bankers

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s