The law of opposites: Illusory profits in the financial sector

Type: Reports Written by Gordon Kerr | Wednesday 14 December 2011

Accurate accounting is at the root of the legal and scrutiny framework; without accurate accounts basic laws are incapable of enforcement. This report argues that international accounting rules have given the impression of illusory profits on bank balance sheets, inflating bonuses and creating perverse incentives for banks to act recklessly.