Bloomberg writes "Banks May Be Using Lehman-​Style Trick to Disguise Debt." The article explains, "​Banks may be disguising their borrowings in a way similar to that used by Lehman Brothers Holdings Inc., with debt ratios falling within limits imposed by regulators just four times a year. Lenders use repurchase agreements -- known as repos -- to massage down their assets as reporting dates approach, typically as quarters end, the Bank for International Settlements said in its Annual Economic Report. The practice boosts leverage ratios -- the ratio between capital and so-​called leverage exposures -- allowing banks to report them as being in line with regulatory requirements, it said. 'The data indicate that window-​dressing in repo markets is material,' BIS analysts said in the report. 'Data from U.​S. money market mutual funds point to pronounced cyclical patterns in banks' U.​S. dollar repo borrowing, especially for jurisdictions with leverage ratio reporting based on quarter-​end figures.'" The piece adds, "Banks' ability to engage in this kind of window-​dressing depends on the jurisdiction they are in, the BIS said. That'​s because while countries including the U.​S. and U.​K. require lenders to report their leverage ratios based on daily averages over the period, others including France, Germany and Switzerland use end-​period reporting."

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