Is FASB & IASB too late to deliver their New Impairment Punch?

Both FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) requested input on their new common impairment model that is based on recording “expected losses” as opposed to the current “incurred losses.” However, this approach only applies to loans evaluated within a portfolio rather than individually. The results could be a double whammy on banks as banks should expect significantly higher ALLL (allowances for loan and lease losses) in addition to the BASEL III higher capital requirements thus meaning little lending capacity. Follow the link to learn more about what the American Bankers Association has posted:

http://www.aba.com/Industry+Issues/IASB_FASIssues.htm

Revamping Bank Executive Pay Courtesy of the FDIC

On January 13th the FDIC stated that they will meet to discuss regulations surrounding executive pay structure to prohibit incentive-based payment arrangements which encourages inappropriate risks for financial firms with more than $1 billion in assets.

http://online.wsj.com/article/SB10001424052748703889204576077932819112712.html?mod=googlenews_wsj

Redefining Basel II for III

In response to the financial crisis of 2008 the Basel committee for bank supervision which is composed of several central bank governors from the top G7 countries, indicated the overhaul of Basel II banking rules to Basel III. Some of new standards include redefining the criteria for Tier 1 capital in addition increasing the bank’s minimum common equity requirements from 2% to 4.5%. As well as creating a new non-risk based leverage ratio that will serve as a backstop to the risk-based measure surrounding common equity and a counter-cyclical capital buffers. While the Basel III requirements will be implemented in phases with the final phase occurring in 2015. If you would like to learn more about Basel III please use the following links:

http://www.economist.com/blogs/freeexchange/2010/09/basel_iii

http://www.bis.org/bcbs/basel3.htm

Interest Paid Could Be New Norm for Corporate Bank Accounts

In November's Payments AFP (Association for Financial Professionals) newsletter the question was raised on whether corporations should choose non-interest bearing but 100% FDIC coverage accounts or whether utilize interest bearing but not 100% coverage bank accounts. The new mandated Dodd-Frank Act has pushed aside the Regulation Q standpoint to consider whether higher interest returns justify risk-free non-interest bearing accounts.

http://www.afponline.org/pub/res/topics/news/news_pay.html

What the most powerful women do to reach the top of Wallstreet

On Oct 6th America's Banker Editor Barb Rehm talks with the world renowned Meredith Whitney who has raised to the top of the analyst world in Wall street. Here is a good candid interview with Meredith and her career. She talks about how she became to the top of her career in a world dominated by powerful men. Very interesting take from a smart woman.

http://www.americanbanker.com/wib_video/?id=1026970&page=1

Technology is amongst us as we can now deposit checks by iPhone.

"USAA, a privately held bank and insurance company, plans to update its iPhone application this week to introduce the check deposit feature, which requires a customer to photograph both sides of the check with the phone’s camera."

Incredible, now we don't even have to visit our friendly tellers anymore and instead use our iPhone while listening to Paramore on iTunes to deposit a check. What more can we ask for, I say? How about security and fraud prevention for the banks. Although these iPhone applications are open source programs written by a developer, the banks have to be extremely careful to secure these valuable codes to prevent hacking and perversions. I love technology but at the same time we have to walk as we are walking on a buttery surface with glass fragments all over.

Source:
http://www.nytimes.com/2009/08/10/technology/10check.html?_r=2&nl=your-money&emc=your-moneyema4

Not only are US firms frauding the Treasury so is the Mafia.

Interesting article on how the venal Mafia, is now defrauding the US Treasury. They not only frauded the buyers of millions try $134bn USD in Treasury Bills.

http://www.ft.com/cms/s/0/82091ec2-5c2f-11de-aea3-00144feabdc0,_i_email=y.html