A senior Democratic lawmaker on Tuesday asked the heads of the U.S. and international accounting rule-making bodies how they can improve transparency of securitized and off-balance sheet assets, such as those linked to subprime mortgages.
In letters sent to Financial Accounting Standards Board (FASB) Chairman Robert Herz and International Accounting Standards Board (IASB) Chairman Sir David Tweedie, U.S. Senator Jack Reed asked what the rule makers are doing to offer investors more advance warning on the types of losses companies that sponsor those assets could face.
"Recent events arising from subprime lending, in which estimates of losses now range from $300 to $400 billion, have only served to highlight the need of investors for timely and complete financial information regarding off balance sheet transactions and activities," Reed, who is Chairman of the Senate Banking Subcommittee on Securities, Insurance, and Investments, wrote in the letters.
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