Please ensure Javascript is enabled for purposes of website accessibility
February 5, 2023

Regulatory Agencies’ Final Word on FAS 166/167

rules_1668_1668.gifThe Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of Thrift Supervision released their long-awaited final word on new rules for securitized assets, specifically for bank balance sheets:

The federal banking and thrift regulatory agencies today announced the final risk-based capital rule related to the Financial Accounting Standards Board’s adoption of Statements of Financial Accounting Standards Nos. 166 and 167. These new accounting standards make substantive changes to how banking organizations account for many items, including securitized assets, that had been previously excluded from these organizations’ balance sheets.

What does this mean for banks? In simple terms, they’re no longer going to be allowed to hide massive amounts of SPEs and derivative exposure off their balance sheets. Hit the deck!

Banking organizations affected by the new accounting standards generally will be subject to higher risk-based regulatory capital requirements. The rule better aligns risk-based capital requirements with the actual risks of certain exposures. It also provides an optional phase-in for four quarters of the impact on risk-weighted assets and tier 2 capital resulting from a banking organization’s implementation of the new accounting standards.

In case your ass has been under a rock for the last year, FASB came after banks’ asses over the summer. Miraculously, the Fed encouraged this switch, leading me to believe they’re just trying to cover their tracks.
Quadruple Whammy: Regulatory Agencies’ Final Rule on FAS 166/167 [JDA]
See also:
FASB Changes, Toxic Asset Shuffle

rules_1668_1668.gifThe Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of Thrift Supervision released their long-awaited final word on new rules for securitized assets, specifically for bank balance sheets:

The federal banking and thrift regulatory agencies today announced the final risk-based capital rule related to the Financial Accounting Standards Board’s adoption of Statements of Financial Accounting Standards Nos. 166 and 167. These new accounting standards make substantive changes to how banking organizations account for many items, including securitized assets, that had been previously excluded from these organizations’ balance sheets.

What does this mean for banks? In simple terms, they’re no longer going to be allowed to hide massive amounts of SPEs and derivative exposure off their balance sheets. Hit the deck!

Banking organizations affected by the new accounting standards generally will be subject to higher risk-based regulatory capital requirements. The rule better aligns risk-based capital requirements with the actual risks of certain exposures. It also provides an optional phase-in for four quarters of the impact on risk-weighted assets and tier 2 capital resulting from a banking organization’s implementation of the new accounting standards.

In case your ass has been under a rock for the last year, FASB came after banks’ asses over the summer. Miraculously, the Fed encouraged this switch, leading me to believe they’re just trying to cover their tracks.
Quadruple Whammy: Regulatory Agencies’ Final Rule on FAS 166/167 [JDA]
See also:
FASB Changes, Toxic Asset Shuffle

Latest Accounting Jobs--Apply Now:

There are currently no vacancies.

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

"mind the gaap" subway markings

FASB Took It Easy in 2022

While the PCAOB has been on a mission to scare the pants off of auditors everywhere in the past year with record fines and scary speeches, the Financial Accounting Standards Board took a much more chill approach to 2022. A Thomson Reuters piece published last week informs us that FASB ended the year having issued […]

FASB and PCAOB Do a Poor Job on Diversity and Inclusion

I’ve spent a good portion of my career monitoring the accounting and auditing standard-setting world and Big 4 firms. So, I read with great interest the letter to the editor to Going Concern on whether the Big 4’s equity, diversity, and inclusion (EDI) efforts are corporate BS. It made me think about the FASB and […]