Basel: Global Standards in Pretty Good Shape
WASHINGTON - The Basel Committee on Banking Supervision on Friday released a report evaluating the 15 international accounting standards that apply to banks.International regulators found no problems with seven of the standards, which provide a foundation for determining a bank's health. Concerns about most of the other standards were minor.
However, the Basel Committee did conclude that International Accounting Standard 30 needs updating. That standard covers disclosures banks make on their financial statements, and the Basel Committee said more information should be released regarding a bank's risk exposures and risk management practices.
The Basel Committee also criticized International Accounting Standard 39, which will require more financial instruments to be accounted for at fair value starting next January. According to the report, IAS 39 will "increase the risk of volatility in reported earnings and equity that may not reflect banks' underlying risk management practices."
A copy of the report is available on the committee's Web site at www.bis.org under "What's New."
- Barbara A. Rehm
Corus to Pay $8M in Student Loan Settlement
CHICAGO - Corus Bankshares said Friday that it has settled a long-running legal battle with the federal government over accusations that it defrauded the student loan program.Last year, the Justice Department alleged in a lawsuit last year that $2.2 billion-asset Corus - which had been under investigation since 1994 - had improperly filed insurance claims for thousands of government-guaranteed student loans that were in default. But rather than call the borrowers to seek repayment, Corus allegedly falsified records to show that it had made collection attempts and then received the government's funds.
The settlement calls for Corus to pay restitution of $7.9 million - much less than the $63 million the government originally sought in fines and damages. The government also agreed not to seek civil or criminal prosecution of any Corus officers, directors, and employees in relation to the investigation.
Since the investigation began, Corus had not sought reimbursement on defaulted student loans. Under terms of the settlement, it is free to submit claims for at least $9 million of the $15.7 million worth of defaulted student loans. The company, which previously charged off the loans, expects to recover the funds from the government by 2001.
- Craig Woker
