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Tag >> loan losses
Aug 20
2010

More trouble for banks

Posted by Ron F in Supreme CourtsecuritizationRiskmortgagesmortgage foreclosuresloan lossescomplianceCitigroupCitiCaliforniaBanksBanking

Ron F

This trend has now reached California, so it's about to become a whole lot more meaningful.

Again, this may be a matter of paperwork, but at minimum, it seems like banks will have to spend time and money straightening out their claims to homes on loans they've securitized.

Feb 15
2010

Deloitte chief wants bank losses spelled out

Posted by MQuinn in Riskloan lossescomplianceBanksAccounting

MQuinn

Deloitte global head Jim Quigley has waded into the debate over how banks account for their loan loss provisions.

He told the Financial Times that he is an "advocate" of banks making loan loss provisions for "incurred losses" separately from "expected losses" and reporting them in two different lines on financial statements.

Seems simple enough, but PricewaterhouseCoopers has previously said that such a disclosure would "muddy the waters," the FT noted. Skeptics worry that banks could abuse the "expected loss" model and engage in "cookie jar" accounting by purposefully stuffing their reserves for losses in good times and using the excess to cover up bad performance.

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