Will wonders ever cease? Instead of pushing the Financial Accounting Standards Board to postpone its rules banning banks' off-balance-sheet vehicles for yet another year, as they seemed inclined to do, bank regulators are proposing to ease their capital reserve requirements to mitigate the impact of the rules.

(Oh, and we must also note that JP Morgan Chase has joined Citigroup and Wells Fargo in complaining about that impact despite its more impressive earnings. Guess JPM still has a ton of dodgy assets that are hidden from investors' view in so-called qualified special purpose entities.)

The thing is, the Fed and FDIC refused to take this relatively high regulatory road last year in response to complaints about FASB's fair value accounting rules, instead banging on FASB to ease up instead. Which FASB reluctantly did.

Bloomberg doesn't explain what accounts for the change of heart. Instead it rather pointlessly notes that FASB's rules aren't subject to approval by bank regulators.

That's formally true. But the fact is that FASB admitted that it changed its fair value rules earlier this year because of pressure from bank regulators. And while Bloomberg also notes that the SEC oversees FASB, which isn't quite true, the Gramm-Leach-Bliley Act, which repealed Glass-Steagall Act's separation of investment and commercial banksing and deserves considerable blame for ushering in the financial crisis, made the Fed the so-called "umbrella" regulator of the system, in effect putting it in a position of authority over the SEC.

The act was also known as Sandy's Law, because it let Sandy Weill's Citigroup buy Travelers, it of the red umbrella logo, but I doubt Congress intended any pun there. Seriously, why would the Fed need more power if it's already the umbrella regulator?

Anyway, all of this leaves me wondering whether the publicity the earlier lobbying effort generated has caused the bank regulators to back off and come up with their own form of relief. Hard to believe, of course, and odds are we will never find out for sure.

Also, this is just a proposal at this point. So it's still possible that the Fed and FDIC will decide that they would rather see FASB change its rules again after all.