FollowForcing all of the banking businesses in the United to anticipate the trouble before it arrives seems more like an irrational move which is not going to yield any good. It is all done by asking the banks to reserve more money in terms of their balance sheets in order to face the losses that are about to come. The trend is now getting more widespread, especially after the crisis of 2007-2008 which forced a number of economies to reformulate their strategies and to start the process of economic growth all over again. So, why now the financial accounting boards in the United States under a constant criticism on the presentation of the proposal to do the same? One reason for this can be linked to the fear that the banks would be abusing the power given to them. Moreover, it is also being said that the banks would be focusing more to make an increase in the loan loss reserves in order to smooth out or notch the profits that would be earned through this process. Edward Trott said in this regard that if he did have some sort of dream way to manage all of the earnings, then the present scenario might be the best for it.
FASB has not finalized a date in terms of the implementation, but the analysts are of the view here that it would all be taking place pretty soon than all would be expecting. Through the use of this proposal, the banks would be able to make their own forecasts in terms of the future loan losses that they would be facing and in reducing the chances of these losses to occur. Jack Ciesielski that the banks would be able to stuff their balance sheets with some huge and extra amounts of reserves and would be able to use them later on in order to smooth out their earnings. But the prime question here is that will these measures and strategies spread out all over the United States and Europe? It would also be seen in the upcoming days that how fruitful these plans might turn out to be.
