Mooted new accounting rules may increase the size of pension liabilities on firms' balance sheets, and other proposals could exacerbate the effect of swings in the value of stocks and bonds.
Morgan Chase spokesman argues the new rule would cover only a fraction of the off-balance-sheet liabilities and therefore isn't a problem.
But most of those initiatives have either failed to get off the drawing board, such as the MLEC, which was aimed at relieving banks of their off-balance-sheet liabilities, or they have fallen short, such as the HOPE NOW Alliance for modifying mortgages.
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Until America and Europe own up to the true magnitude of the problem and sort bad debt from good to get toxic liabilities off financial-industry balance sheets, no amount of talking or stimulus will mend the global downturn, he warns.
With legacy countries in a state of long-term insolvency, and major banks highly leveraged and with opaque balance sheets sitting on trillions in liabilities, policymakers have resorted to one of the most dangerous solutions in the aftermath of the financial crisis: money printing.
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It's the same as it ever was: mutualisation of all the eurozone's debts, which in practice means that the mighty German sovereign balance sheet would stand behind the enormous liabilities of the rest of the eurozone.
The critics assume implicitly that all the expansion on the asset side of the Fed's balance sheet is offset by monetary liabilities, which simply isn't true.
Much of expansion is absorbed by non-monetary liabilities on the Fed's balance sheet.
Thus, the balance sheet looks like this: 850 of assets (after a 150 loss), 900 of liabilities in the form of borrowed money, and negative equity of 50.
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Deferred tax liabilities, off-balance sheet debt, and asset write-downs result in a bloated balance of which most investors are not aware.
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