This is a follow-up to In May, FASB (Financial Accounting Standards Board) changed an accounting rule that eliminated the exemption for Qualified Special Purpose Entities from balance sheet treatment. This rule would require financial conglomerates to show all of those special investment vehicles and other "off-balance sheet" investment vehicles they have been hiding. This change in effect would shed some light on the "shadow" banking system. FASB made this change in the interest of more transparency in financial reporting.

The Fed.

With regulator like the Fed, these financial conglomerates don't need friends. The Fed is uneasy about this rule change that will take effect in 2010:

The U.S. Federal Reserve has privately expressed concerns over new accounting rules that could force banks to move more assets onto their books, a person familiar with the Fed's thinking said on Friday.

That is right. The future Systemic Risk Regulator - the Fed - does not like transparency or the fact that toxic waste that has been stored off the balance may be hoisted on to financial conglomerates balance sheets. See, it is OK if financial conglomerates and the Fed know that financial conglomerates own toxic waste but it is not OK for us to know.

Why is the Fed uneasy about this change? Because that would upset the status-quo. Financial conglomerates, in order to support their size, need higher and higher returns but higher returns come with more risk taking. But obviously, they have a problem with risk and may need a bailout in the future. So, the next time they need a taxpayer bailout they could continue to make it look like they were providing a valuable service to our economy by intermediating and facilitating credit and are essential to the health of our economy. It is all about preserving the "House of Cards" for the financial oligarchy.