Wendy Sherman: “This resolution is terrible accounting policy. It has nothing to do with whether banks are allowed to act as custodians…”

“This resolution is terrible accounting policy. It has nothing to do with whether banks are allowed to act as custodians since it has no effect on bank regulation, no effect on the calculation of their capital, and no effect on regulatory accounting. This resolution deprives investors of the knowledge of what risks the bank they are investing in is running. It says you can't put it on the balance sheet on the theory that nothing should be on the balance sheet unless it is owned by the entity whose balance sheet is being filed. Anyone familiar with lease accounting knows that that is not the basic principle that is carried out with an awful lot of assets that are listed on the balance sheet. It goes further. It says not only can't the chief accountant and the staff accounting bulletin require disclosure on the balance sheet, but they are prohibited from doing another regulation and disclose it in the footnotes. This is terrible accounting policy. Madam Speaker, I urge my colleagues to vote ``no.''”