Accounting standard FAS 155 has disappointed the synthetic collateralized debt obligation market, panelists said. The update to Financial Accounting Standards Board's original derivatives standard FAS 133 was expected to boost participation in hybrid and synthetic structures because it allowed investors to not mark-to-market on-balance sheet accounting (DW, 3/31). "[FAS 155] has led to disappointment in the U.S. for not jump starting synthetic CDOs," said Douglas Lucas, executive director at UBS in New York. "We're a little better than we were without it, but [FAS 155] has not been the shot in the arm the market was expecting."
FAS 155 Disappoints Synthetic Market
