European banks would be less scary if they were in the US February 22, 2013 at 6:36 am
Matt Levine is wrong. He has a post U.S. Banks Would Look Scarier If They Were European Banks which is entirely the wrong way around. Yes, if US banks reported under IAS their balance sheets would be bigger, but that’s because IAS is wrong and US GAAP right. The real problem is HSBC, Deutsche and Co.’s balance sheets are swollen by the utterly idiotic accounting for derivatives recently imposed by the IASB. Fortunately ways around that are being developed, as we will hopefully see shortly.