The Financial Accounting Standards Board may be changing the rules on how banks account for loans made at below-market rates in order to win future business from a client.
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Some banks, such as Bank of America have come out against the changes in their comments to FASB, but some, such as Goldman Sachs, appeared to support such a change. Goldman believes it would clarify the linkage between lending and investment banking, which it refers to as “relationship lending.” As we know, those relationships can be cozy indeed when a large bank hopes to win future business from big business clients.