Defrocked, I hope this is the right place, I copied the juicy part.
It is actually worse than I first grasped in my trivial mind. The banks will be able to carry stock at what they bought it rather than mark to book (which I am not sure what that means in this case, but I presume is what we call "mark to Market?)
biz.yahoo.com
Measures announced on Wednesday, including revisions of accepted accounting practices and using as much as 13 trillion
yen ($100 billion) to boost bank capital by buying preferred shares or subordinated bonds, left the raters unimpressed.
The tinkering with accounting practices, which will allow banks to choose between current accounting methods and
mark-to-book practices, drew particular scorn from raters, who said the change will only obscure problems at the banks.
Currently, banks must post appraisal losses if the market value of shares they own falls below the book value. The package
will give them the option of valuing their shares at what they paid for them, obliterating any officially recognised losses on their
portfolios.
''The change in accounting standards will make less transparent to the public the real financial situation at banks,'' said an
official at Fitch IBCA.
I hope that helps. The point was that by accounting finanigans they are trying to remove the all important 14,000 Nikkei level. I wonder if they will let a Bank "mark to Book" the winning stocks and carry at "what they paid for" their losing positions. This will be the epitomy of "creative accounting", As Sumitomo, I could carry on my book some good old Anaconda Shares ( I never bought them but I am sure Sumitomo Bank has a bunch since they used to buy whatever stock was in Copper (VBG)).
Zeev |
