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Wednesday, April 22, 2009

Progressive Group Says Lending Decline Continues Despite Favorable Bank Earnings Reports, Calls for Independent Investigation

In a statement issued yesterday, the Campaign for America’s Future, which presents itself as a progressive political group, asserted that major banks have employed accounting rules “to obfuscate losses” in recent favorable earnings reports.

The announcement also called for the government to step in and investigate the causes and scope of the financial crisis. While supporting the Congressional Oversight Panel chaired by Harvard Law Professor Elizabeth Warren as “a step in the right direction,” the announcement warned that a more forceful investigation with subpoena power is needed.

“These major banks are carrying toxic paper that they don’t want to mark down, for fear it would reveal just how insolvent or close to insolvent they are,” according to Robert Borosage, Co-Director, Campaign for America’s Future, in a statement in the organization’s news release. “They understandably will do what they can to hide the reality. In recent weeks, we’ve seen accounting standards diluted to aid them in that effort, and now we see accounting dodges to suggest they are on the way back. Meanwhile, actual lending continues to decline.” Sphere: Related Content

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