The Treasury Department’s Office of Thrift Supervision
(OTS) advises savings associations to consult it before they consider
transferring to an external entity their high-risk assets—such as
nonperforming loans—when the bank retains significant credit risk
related to those assets and simultaneously provides considerable
funding to the receiving entity ( www.ots.treas.gov/docs/25156.pdf
). In order to remove troublesome assets from their balance
sheets, the watchdog agency says, some banks have executed such
transactions and inappropriately accounted for them as sales.
Banking
