Accounting FTW! New FASB Rules to Hurt 5 Big Banks - Suck it, Financials!
You know how I feel about fudging accounting rules to make it easier for big bank scammers to readjust toxic assets as if they are a pair of sweaty balls hanging slightly to the left so I'll save that particular rant. We aren't talking about a poorly hanging sack here, asshats, we're talking about the fundamentals of our already-fragile accounting! WTF are you doing?
This one, however, may turn out to be a win. I'm all about exposing the true condition of these banks' pathetic balance sheets. More importantly, I'm all about exposing what lies festering outside of the realm of their balance sheets. And I believe the toxic creatures feeding on the scum of these banks' books are about to be brought into the light. Yay!
(Reuters) - At least five U.S. banks, including Bank of America Corp (BAC.N), Citigroup Inc (C.N) and Wells Fargo (WFC.N), will be "materially" impacted by the new accounting rules, Fox-Pitt Kelton said.
The other banks, under the brokerage's coverage, that will be hurt by the new rules are J.P. Morgan Chase & Co (JPM.N) and Fifth Third Bancorp (FITB.O).
The brokerage, which has an "outperform" rating on Bank of America and Wells Fargo, and "in line" ratings on the other three, said that credit cards would have the most meaningful profit-and-loss impact.
The Financial Accounting Standards Board (FASB), which sets U.S. accounting rules, voted on Monday to adopt two rules that could force financial institutions to bring more off balance sheet assets onto their books.
"Consolidation of off-balance sheet assets would obviously increase GAAP and risk-weighted assets. This, along with reduction in tangible capital equity (TCE) and Tier 1 capital... would reduce TCE and Tier 1 ratios," the brokerage said.