The Federal Reserve Board issued guidelines Friday endorsing a recent loan-loss reserve article by the Financial Accounting Standards Board.
The guidelines, sent to state member banks and their examiners, said the FASB's article would have only a "limited impact" on reserves set aside by banks. It also said the Fed would "play an active role" in future interagency efforts to more broadly reexamine loan-loss accounting issues.
No other banking agencies issued the guidelines. In fact, the Office of the Comptroller of the Currency has distanced itself from the Fed and from the FASB article, which it fears will encourage banks to shed reserves.
The Fed's guidelines may also signal a new alliance on the issue with the Securities and Exchange Commission, which told banks Thursday to comply with the FASB article. - Scott Barancik