09:49 AM
Banks Using Unethical Accounting?
The SEC and FBI have been investigating if more than two dozen banks were hiding bad debt by using the repo method, which allows banks to "hide" balance sheet debt at the end of the quarter. Allegedly, Lehman Brothers hid up to $50 billion at a time before it failed. One problem: the SEC didn't have the knowledge or the talent to discover the repo method tactics. The SEC is undermanned and the staff is underpaid. Here's more on the topic from MSNBC.
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The SEC and FBI have been investigating if more than two dozen banks were hiding bad debt by using the repo method, which allows banks to "hide" balance sheet debt at the end of the quarter. Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio