Banks likely have been “backdating” transfers to HTM, thereby understating unrealized losses in equity.

On page 2 of this quarter’s supplemental instructions for filling out Call Reports (some of my favorite reading…which is yet another reason I struggle at cocktail parties), there is a warning that presupposes that the FFIEC has reason to believe that banks have backdated transfers to HTM.

Why would they do that? In order to pretend that the transfer happened when rates were lower and the unrealized losses on the securities transferred were lower.

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  • 30-year career as a Bank & FinTech sector stakeholder with substantive roles as investor, policy maker, regulator, operator, analyst, strategist, and advisor.

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