The Federal Deposit Insurance Corporation (FDIC) on Dec. 16 issued a rule giving banks more time to implement major new accounting rules for securitizations. Beginning in 2010, new accounting standards issued by the Financial Accounting Standards Board (FASB)—FAS 166 and FAS 167—will make substantive changes to how banks account for securitized assets that are currently excluded from their balance sheets.
Specifically, they will require financial institutions to bring most securitizations, including commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities, onto their balance sheets, which will result in higher minimum regulatory capital requirements for banks.