SEC tells CFOs to keep an eye on reserves for loan losses

08/24/2009 | CFO.com

In a reminder to chief financial officers of all public companies, the Securities and Exchange Commission said that, in light of today's economic environment, businesses might be wise to "reassess" their loan-loss reserves. The whole issue of forecasting loan losses, to establish appropriate reserves, has been getting a lot more attention since the subprime-mortgage crisis caught investors by surprise. Many publicly traded financial institutions were holding reserves that fell short of what they needed to cope with the defaults.

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