Repo-to-maturity revamped by FASB, SEC
28 March 2012 Washington
Image: Shutterstock
An overhaul of the accounting rules that led to the collapse of MF Global could take place this year, said officials at FASB and SEC.
"Moving forward with this project will involve a series of public education and decision-making meetings…we currently anticipate that any resulting amendments from this project could be issued in 2012" said FASB director Susan Cosper in prepared testimony.
In 2011, FINRA expressed doubts if it was right for MF Global to finance its European sovereign debt bets through repo-to-maturity transactions in order to move the exposure off of its balance sheet.
"That is a loophole so big you could drive a Mack Truck through it," Democratic Senator Kent Conrad told SEC chairman Mary Schapiro during a hearing in December. "If that's not closed down, we really got to ask ourselves what we're doing."
Discussions about repo-to-maturity accounting took place early this year between the FASB and SEC, whereby Cosper said that insight from other parties confirmed that users of financial statements broadly believe that disclosures for repurchase agreements should be improved.
"Moving forward with this project will involve a series of public education and decision-making meetings…we currently anticipate that any resulting amendments from this project could be issued in 2012" said FASB director Susan Cosper in prepared testimony.
In 2011, FINRA expressed doubts if it was right for MF Global to finance its European sovereign debt bets through repo-to-maturity transactions in order to move the exposure off of its balance sheet.
"That is a loophole so big you could drive a Mack Truck through it," Democratic Senator Kent Conrad told SEC chairman Mary Schapiro during a hearing in December. "If that's not closed down, we really got to ask ourselves what we're doing."
Discussions about repo-to-maturity accounting took place early this year between the FASB and SEC, whereby Cosper said that insight from other parties confirmed that users of financial statements broadly believe that disclosures for repurchase agreements should be improved.
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