US accounting body to unveil new bank-reserves standard

New York

A US accounting regulator plans to release new rules on Thursday that will change how banks set aside money for bad loans, raising fresh questions about the role of forecasts in their financial reports.

The Financial Accounting Standards Board's goal in setting up the new framework for loan-loss reserves is simple: it wants to reduce the likelihood that investors will get blindsided by a sudden deluge of bad loans, as they did during the 2007-2009 financial crisis.