US banks understate debt, masking risk: Report

Acquiescence of FASB 157 - fair value measurements in 2008 allowed financials institutions to mark their debt to model rather market. This decision was criticial to the restoration of profitability and economic illusion.

The newspaper, citing data from the Federal Reserve Bank of New York, said 18 banks have understated the debt used to fund securities trades by lowering them an average of 42 percent at the end of each of the past five quarterly periods.

Source: economictimes.indiatimes.com