Analysis: Fed stress test might understate derivatives exposure:

03/7/2013 | CNNMoney/Fortune

The Federal Reserve's stress test of banks highlights problems with the more lenient U.S. method of derivatives accounting, which might make banks look stronger than they would under the corresponding European method. European derivatives accounting does not let banks net out contracts owed to one another, while the U.S. method does. The U.S. method could disguise the true state of banks' exposure to derivatives and their overall balance-sheet health, analysts say.

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