Parsley;
One of my friends is a director on a Credit Union here in Alberta.
We talked through these Interest rate swap contracts "OFF BALANCE SHEET FINANCIAL INSTRUMENTS"
Properly, the only way this can happen as "OFF BALANCE SHEET FINANCIAL INSTRUMENTS", is if there is no risk on these transactions... other than the income flow from them.
These are supposed to be swaps between floating interest rates to fixed term, or the reverse... whichever fills the need of the borrower who the CWB is properly contractually fulfilling the terms of the debt contracted.
To have Credit Risk mixed in to these instruments, and have that Credit Risk grow to $24,759,486.00 in 2002, from $773,394.00 last year... should make warning bells go off all over the place!
These tools are properly only risk mitigation tools... not allowed to add risk to a financial statement.
My friend was rather surprised that any Auditor would allow this today... as on Credit Union Balance Statements, the Auditors are even trying to have Common Shares accounted for as liabilities... instead of Assets as the legislation governing these institutions stipulate.
Enron and Worldcom have tightened up things very much... for everyone but the CWB!
GO FIGURE!
I wonder how much extra this costs the CWB?
One of my friends is a director on a Credit Union here in Alberta.
We talked through these Interest rate swap contracts "OFF BALANCE SHEET FINANCIAL INSTRUMENTS"
Properly, the only way this can happen as "OFF BALANCE SHEET FINANCIAL INSTRUMENTS", is if there is no risk on these transactions... other than the income flow from them.
These are supposed to be swaps between floating interest rates to fixed term, or the reverse... whichever fills the need of the borrower who the CWB is properly contractually fulfilling the terms of the debt contracted.
To have Credit Risk mixed in to these instruments, and have that Credit Risk grow to $24,759,486.00 in 2002, from $773,394.00 last year... should make warning bells go off all over the place!
These tools are properly only risk mitigation tools... not allowed to add risk to a financial statement.
My friend was rather surprised that any Auditor would allow this today... as on Credit Union Balance Statements, the Auditors are even trying to have Common Shares accounted for as liabilities... instead of Assets as the legislation governing these institutions stipulate.
Enron and Worldcom have tightened up things very much... for everyone but the CWB!
GO FIGURE!
I wonder how much extra this costs the CWB?
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