SPE accounting proposal threatens CDO market

Proposed changes to US accounting standards for special-purpose entities (SPEs) could cause a dramatic decline in issuance of collateralised debt obligations (CDOs), analysts say. The Financial Accounting Standards Board (FASB) is now considering changes to FAS 94, which sets out rules for the consolidation of subsidiaries on to their parent companies’ balance sheets.

These changes would almost certainly force some sponsors to bring their CDOs on to their balance sheets. CDOs are usually

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