Or rather, Citigrope does. Ooops. Fat fingers. Dear me.
Remember that note, issued by Citi, on Barclays earlier tooday? The one that sent CDS up 11bp and the shareprice down a few per cent?
Among other things, it raised questions about Barclays rather suspect – sudden – classification of CDOs and CLOs as long-term assets rather than tradable (writedownable) assets. You know – this:
We also note that Barclays has adopted somewhat unusual accounting practice. Generally, assets within trading portfolios are marked to market. However, Barclays has reclassified some assets, most notably leveraged finance and CDOs, and accounts for them as if they were loans held to maturity. This means that these assets are not marked to market but impairment provisions are raised when the bank believes that there is a risk to the credit outlook. While this is an unusual treatment for leveraged finance, as the financing was originally intended to be sold down, the assets are at least
primarily loans. The treatment is even more unusual for CDOs exposures.
Well anyway, just to be clare,
The last paragraph on page 7 contained a typing error. It should read ‘…classified some assets…’ rather than ‘…reclassified some assets’
Glad that’s sorted then. Classified. Not reclassified. Just a typo. Nothing to see here. Move on people. Nothing to do with suspect accounting practices at all.
If only all investment banks pursued minor grammatical slip ups with such elan. Unless, that is, there’s something moor twit?