Kiplinger on the Banks

From the July 10, 2009 Kiplinger report:

"They’ll soon have to account for billions in securities now held off the books.
The Financial Accounting Standards Board is getting rid of a loophole that banks
have used to sequester risky assets in special subsidiary companies…much the way
Enron did years ago. In fact, after Enron crashed, FASB cracked down on their use,
but not far enough. Banks, particularly, found ways to use the special purpose entities
to hold trillions of dollars’ worth of credit card, mortgage, home equity and auto loans.
For the nation’s 19 biggest banks, stress tests have anticipated the impact
of the rule change. So…no big market jolt, even though about $900 billion in loans
will start to show up on their books late this year or early next. For smaller banks
that used the special entities, the rule change will put more liabilities on their books."

Anticipated via the stress tests, but what about the balance sheets and earnings? Not too good......