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False economies.

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[QUOTE=coalition;403366]If we want to discover what real falsity is...we only need look at Banksters Accounts, they are nothing but financial imagination, with the single aim of fraud.

Adam Smith Research Trust 2011

However, this paper argues that banking has become an exception to this
general rule. Recent developments in the accounting rules applied to banks,
and in the broader regulatory framework for banks, have allowed bank
executives to overstate their profits, feeding through into multi-million pound
bonuses for themselves and short-term gains for their shareholders. When
it comes to banks, accounting rules fail to perform their role of avoiding
deception and consequent misallocations of capital. Given banks’ financial
inter-dependence, the scale of their assets and their central role in allocating
capital across the economy, this failure is of much greater significance than it
would be in other industries.
This paper does not lament the forgone age of bank deregulation that
allegedly caused the crisis. Its complaints apply to the system of bank
regulation and accounting that are in force today and are planned for the
future. The rules introduced in reaction to the crisis – rules aimed at making
the banking system more transparent and its capital more secure – have
retained the International Financial Reporting Standards accounting rules
that encourage profit exaggeration. And the updated international rules
specifying banks’ capital and liquidity minima will only exacerbate the
incentives for bankers to engage in business aimed at nothing more than
“gaming the system”. As so often, these new policies have the opposite of
their intended effect.
There are a number of problems with these accounting standards, not least is
their conflict with UK law. Of great concern is that IFRS allows the ‘recognition’
of years of hoped for future income as current profit today. This paper is
structured around six important shortcomings in the rules governing bank
profit and capital reporting:The Law of Opposites | 7

[B]Uncertain future cashflows can be recognised as certain by purchasing a [/B]
[B]credit default swap (CDS) or similar “protection”, even though the supplier [/B]
[B]of the protection is likely to default if the insured event occurs;[/B]
[B]• Profits can be recognised from the increased value of assets, or decreased [/B]
[B]value of liabilities, on the basis of a market price, even though the totality [/B]
[B]of revalued assets or liabilities could not be sold at that price;[/B]
[B]• Profits can be recognised from the increased value of assets, or decreased [/B]
[B]value of liabilities, even when the revaluation of assets is estimated, not [/B]
[B]by market prices, but by a model built by bank employees. This is the [/B]
[B]so-called mark-to-model approach to valuation;[/B]

• The net present value of uncertain future cashflows can be recognised
as profits even when they are estimated using implausibly optimistic
forecasts. (This is a variation of the mark-to-model problem listed above);
• The EU’s IFRS accounting system, voluntarily adopted by UK and Irish
banks at the banking company level, is inconsistent with UK law
• Banks need not make provision for expected losses when calculating
their profit.
Much of the activity in the banking sector is aimed at nothing more than
exploiting these accounting rules to register inflated fake profits and hence
convert shareholders’ equity and, in extremis, debt-holders’ and taxpayers’
funds into executive bonuses.

You're Bank is crooked, are you fool enough to risk doing business with them. A simple alternative is a Credit Union or a carefully chosen Building Society.
Be afraid, be very afraid of Banksters.[/QUOTE]
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