Cheaper access to dollars from the Fed (via the ECB) for euro-zone banks will give them greater incentive to roll over existing liabilities rather than merely shrinking their balance sheets at the current breakneck pace.
This year, the latter group is stepping up to the plate and beginning to place bets buoyed by the strength of current business results, strong balance sheets and their pent-up need to find growth.
No one wants to buy that, and Yingling says, if banks have to record the current value of these securities on their balance sheets, they end up taking huge loses.
"Interest rates are coming down, current-account surpluses are emerging, corporate balance sheets are being restructured, and banking-sector recapitalization is moving along at a good pace almost everywhere in the region, " contends Manu Bhaskaran, a managing director at SG Securities (Singapore).
This regulation required the balance sheets of financial institutions to list assets at their current market prices every day, rather than their historical costs or their expected values based on their probable future income streams.
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The continued recovery of the residential real estate market is needed for the U.S. economy to build upon its current recovery efforts due to its implication on personal household balance sheets and overall consumer sentiment.
If the eurozone does turn the current jaw-jaw into a war-war against the weakness of banks' balance sheets, how much capital would European banks be forced to raise - and which big banks would be forced to raise the most?
He has not used his newfound authority to hack at the root of the current panic, the regulatory mandate to mark these assets down to panic prices, even on the balance sheets of those companies who are not engaged in panic selling.
Current accounting rules allow retailers that sign certain long-term leases to omit the leased property from their balance sheets. (The basic rule is that omission is acceptable if the lease term is less than 75% of the useful life of the building.) But the Financial Accounting Standards Board may change that next year.
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