Mish over at the Global Economic Trend Analysis caught a story in the FT about the possibility of banks being forced to put $5 trillion back on their balance sheets.
The FT article says:
Accounting changes could force U.S. banks to take thousands of billions of dollars back on to their balance sheets in the coming months in a move that is likely to curb further their lending and could push them into new capital raisings, analysts have warned.
Analysts at Citigroup said a planned tightening of the rules regarding off-balance sheet vehicles would force banks to reconsider arrangements and could result in up to $5,000bn of assets coming back on to the books.
–FT, 4 Jun 2008
If you thought deleveraging was tough now, wait until a collective $5 trillion is added to balance sheets! Needless to say, we should blame regulators for allowing this garbage to be off balance sheet in Structured Investment Vehicles (SIVs) and other ridiculous schemes.