January 2012
The International Accounting Standards Board and the Financial Accounting Standards Board agreed on how to require banks to book losses on loans earlier than they do now. The deal calls for all loans to start in a first category,
when a bank books losses on cash flows it thinks it may not receive over the next 12 months. Lifetime losses would be booked only if there has been a
significant deterioration in credit quality, and default is likely. The boards will release the revised joint proposal on impairment in 2012, with the
standard likely to be effective in 2015. Read more»
Kurtzman Carson Consultants says that in 2012, banks are likely to be more selective about extending credit, ending the “amend and extend”
approach. “Amend and extend deals were done based on expectations of economic improvement that have not happened,” said Benjamin Schrag, vice
president of business development at Kurtzman Carson. “It can’t go on forever. The economic situation hasn’t improved.” Read more»
April 2011
Regional banks are reporting better quarterly earnings, and some bankers said they are ready to lend more. However, the fragile economy is holding down demand, they said. U.S. Bancorp and Comerica, for example, said companies continue to keep cash rather than invest. Read more»
October 2010
The Financial Accounting Standards Board’s proposed bank regulations, which would make banks report the estimated fair value of most loans on their books as well as the current-cost-accounting valuations, are opposed by two-thirds of institutional investors, according to a survey by investment bank Keefe, Bruyette & Woods and Greenwich Associates. However, many of the 62 institutional investors that were polled said that accounting standards need to be revised. Read more»
