{"id":35451,"date":"2018-06-24T15:43:12","date_gmt":"2018-06-24T20:43:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=35451"},"modified":"2018-06-24T15:43:12","modified_gmt":"2018-06-24T20:43:12","slug":"bis-confirms-banks-use-lehman-style-trick-to-disguise-debt-engage-in-window-dressing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=35451","title":{"rendered":"BIS Confirms Banks Use “Lehman-Style Trick” To Disguise Debt, Engage In “Window Dressing”"},"content":{"rendered":"
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BIS Confirms Banks Use “Lehman-Style Trick” To Disguise Debt, Engage In “Window Dressing”<\/span><\/a><\/h3>\n<\/div>\n
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Several years ago we showed how the Fed’s then-new Reverse Repo operation had quickly transformed into nothing more than a quarter-end “window dressing” operation for major banks, seeking to make their balance sheets appear healthier and more stable for regulatory purposes.<\/p>\n

As we described in article such as “What Just Happened In Today’s “Crazy” And Biggest Ever “Window-Dressing” Reverse Repo<\/a>?”,Window Dressing On, Window Dressing Off… Amounting To $140 Billion In Two Days”, <\/a>“Month-End Window Dressing Sends Fed Reverse Repo Usage To $208 Billion: Second Highest Ever<\/a>“, “WTF Chart Of The Day: “Holy $340 Billion In Quarter-End Window Dressing, Batman<\/a>“, “Record $189 Billion Injected Into Market From “Window Dressing” Reverse Repo Unwind<\/a>” and so on, we showed how banks were purposefully making their balance sheets appear better than they really with the aid of short-term Fed facilities for quarter-end regulatory purposes, a trick that gained prominence first nearly a decade ago with the infamous Lehman “Repo 105<\/a>.”<\/p>\n

And this is a snapshot of what the reverse-repo usage looked like back in late 2014:<\/p>\n

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Today, in its latest Annual Economic Report<\/a>, some 4 years after our original allegations, the Bank for International Settlements has confirmed that banks may indeed be “disguising” their borrowings “in a way similar to that used by Lehman Brothers” <\/strong>as debt ratios fall within limits imposed by regulators just four times a year, thank to the use of repo arrangements.<\/p>\n

For those unfamiliar, the BIS explains that window-dressing refers to the practice of adjusting balance sheets around regular reporting dates, such as year- or quarter-ends and notes that “window-dressing can reflect attempts to optimise a firm\u2019s profit and loss for taxation purposes.”<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

BIS Confirms Banks Use “Lehman-Style Trick” To Disguise Debt, Engage In “Window Dressing” Several years ago we showed how the Fed’s then-new Reverse Repo operation had quickly transformed into nothing more than a quarter-end “window dressing” operation for major banks, seeking to make their balance sheets appear healthier and more stable for regulatory purposes. As […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1733,58,61,63,1269,195,303,20652,3650,11423,4318],"class_list":["post-35451","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-for-international-settlements","tag-bank-regulations","tag-banking","tag-banks","tag-bis","tag-debt","tag-fed","tag-reverse-rep","tag-us-federal-reserve","tag-window-dressing","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35451","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=35451"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35451\/revisions"}],"predecessor-version":[{"id":35452,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35451\/revisions\/35452"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=35451"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=35451"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=35451"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}