Citi Full Circle
The Financial Accounting Standards Board, or FASB, earlier this month quietly amended FAS 140, effective at the end of the year, eliminating qualified special purpose entities, or QSPEs. If you thought mark-to-market accounting changes had an effect on the banks, hold onto your hats.
The special purpose vehicles allow banks to stash things like asset-backed securities and other unwanted assets, reducing the amount of reserves they need to hold. The QSPEs also are a great way to hide losses.
Citigroup (C Quote) had $822 billion in QSPE exposure last year, according to its annual report. That’s tops among the four largest banks.
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