Commercial banks and investment banks are squaring off amid the Financial Accounting Standards Board decision to reassess a ruling that loan commitments aren't considered derivatives. FASB is now reassessing the ruling as a result of pressure from investment banks, including Goldman Sachs, which went on the offensive in April to convince the board that the definition of a derivative should apply to credit arrangements. FASB insiders said Goldman laid out "persuasive arguments" as to why more loan commitments meet the definition of a derivative. They are aware of the problem banks may have with any change, but would be looking strictly at the technical aspects of the issue.
Banks Clash Over Derivatives Definition
