Banks’ off-balance sheet rules are ‘broken’

Rules regarding how banks account for off-balance sheet interests are “irretrievably broken”, a senior group of international rulemakers has warned. The rules, which have allowed trillions of dollars in assets to escape close scrutiny, have come under attack in the wake of the credit crisis as banks have been forced to disclose huge losses on these holdings. But a report by accounting industry bodies FASB and IASB warns that completing a final standard by mid-2011 will be extremely difficult, perhaps impossible”.