The risk of a debt default looks to be much lower than it was three months ago for Citigroup Inc., Bank of America Corp. and other large financial institutions. That is the good news.

It also is the bad news, because it means a peculiar aspect of mark-to-market accounting — the part that lets companies value certain liabilities based on their worth in the marketplace, as opposed to the amount the companies actually are on the hook for — probably worked against the big banking firms last quarter, after providing a windfall to the bottom line in the first quarter.

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