Fed's stress tests may understate derivatives exposure

03/7/2013 | CNNMoney/Fortune

Federal Reserve stress tests of the nation's financial institutions highlight the 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, writes Stephen Gandel. The U.S. method may disguise the true state of banks' exposure to derivatives and their overall balance sheet health, some analysts say.

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