The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Deutsche Bank Notes: We always comply with Accounting Standards. This is a loss only if we..

English: Goldman Sachs Tower, Jersey City, New...

English: Goldman Sachs Tower, Jersey City, New Jersey (Photo credit: Wikipedia)

continue to treat is on market price. These are actually illiquid and could be treated as Held to Maturity Portfolio. But we would miss the opportunity to call out people at Goldman Sachs or something?..

In 2010, when Ben Artsi actually moved from Goldman Sachs to Deutsche Bank, his ex-employer at Goldman Sachs had already, under the same David Viniar who was there from before the crisis, reached the same conclusions about illiquid securities in a Held to Maturity portfolio accounting or rather accounting them at cost because market prices were too few and the moves too random to be of any fair use in valuing such securities. However seemingly, the SEC has taken up an investigation into a similar portfolio at Deutsche Bank for using Held to Maturity accounting on a $1309 B portfolio and according to first reports this would have covered at least $12 B in losses on such a portfolio according to the FT and Bloomberg.

But such confusion in accounting translating into an SEC investigation regardless of Ben Artsi’s complaint or otherwise should more be the exception than the rule and organisations should probably be faster in issuing clarifications on such changes in accounting as we were when Goldman conscientiously and in line with the caution required in the change very publicly made the announcement regarding the changes and their reason following it with appropriate BSC responses and should be the required needing to be done by the Lehmans the Auditors with or without access to transparency in China and regulators back home or European Banks with or without business in US, Asia or any other geography.

As of now the SEC investigation deals a blow to Deutsche Baank and Banking in general yet again as it shows how far we are from a resolution to the bad asset losses in terms of bit e back risk as banks get around to the businessof making a decent profit leaving only the Top 2 globally Goldman Sachs and JP Morgan in the clear when it coes to being able to make a consistent profit.


maturity (Photo credit: Scot Nelson)

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