WASHINGTON - Federal bank and thrift regulators on Thursday said banks may reserve for loan losses by estimating future defaults, placing federal rules on a collision course with changing accounting standards.

The four agencies, in proposed guidelines, said the industry's current practice of reserving for losses that have not yet occurred conforms with generally accepted accounting principles, or GAAP. When a loss may be recognized is part of a larger statement laying out the documentation regulators expect banks to complete to justify their reserve levels.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.