Capital Standards under review

According to Reuters, there are new standards that could affect the way banks look at off-balance sheet vehicles. This could cause banks to have to move assets throughout books and affect their assets.

Some financial firms created special entities separate from their balance sheets to avoid reporting requirements or to reduce the amount of capital they needed to hold to satisfy regulatory requirements. As the financial storm gathered, uncertainty about some of those vehicles helped undermine confidence in banks and accelerated the financial crisis.

The new standards are aimed at improving accounting and disclosure associated with those vehicles.

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