Friday, May 22, 2009

Banks Balance Sheets Lacks Transparency

Counterparty risk is a major concern for corporates today especially if the counterpart is a bank. It is virtually impossible to understand the true risk that lies in its balance sheet making it very hard to manage the excess liquidity.

The banks must improve the accounting standards and make the accounts as transparent and open as the corporates. We need a paradigm shift in evaluating and regulating the financial sector.

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