McKenna Quoted in American Banker re: Second-Lien Mortgages

By • May 8th, 2011 • Category: Fair Value, Regulators, Laws, Standards, Regulations, SEC, Subprime, You Can Quote Me On That

I was quoted on May 2, 2011 in American Banker by Alex Ulam entitled, “Why Second-Lien Loans Remain A Worry”.

I was previously quoted in American Banker on bank balance sheet window-dressing.

My quote focused on disclosures and transparency – for the loans and the reserves for losses. It’s a subject I’ve written about extensively.

Has transparency improved?

Financial Accounting Standards Board rule updates that went into effect last December did require banks to disaggregate their data and to be more specific in their disclosures.

However, the FASB rule updates still leave banks with a lot of discretion as to how they break out their data on receivables such as second-lien loans.

“In general, we are seeing definitely better disclosure and more detailed disclosure,” said Francene McKenna, president of the consultancy McKenna Partners LLC. “However, it looks like they are still to some extent being somewhat a little optimistic on what the future is going to hold,” she said. “There are still missing pieces; you really wish for some kind of consistent disclosure.”

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2 Responses »

  1. […] When I challenged the SEC to push harder on the reserves issue they stepped up. But disclosures are still not complete. […]

  2. […] Fortunately, the SEC has been pushing them on both. It’s getting better but new pimples, like second-lien loan exposure, are still popping […]

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