This Explains the Subprime Problems, Banks Cannot Use Excel®

Banks are petitioning theFinancial Accounting Standards Board (FASB) to relax rules on non performing home loans. They say that the rules are too complex and difficult.

The rule in question, Financial Accounting Standard 114, "Accounting by Creditors for Impairment of a Loan", is also fifteen years old.

Before FAS 114, banks could count non-performing loans on their books as if they were to be paid back in full, which meant that defaults would almost never show up on the balance sheet until too late.

It should be noted that these banks that are crying that this is too difficult have been applying it without difficulty to commercial mortgages and corporate loans for the past 15 years.

You can do this in Excel^®, BTW.

This is not about complexity. It's about concealing losses from the public.