Many banks are failing to make public the true extent of their credit crunch losses, the Securities and Exchange Commission (SEC) has found.
According to the regulator, around $35 billion of additional asset-backed securities write-downs stemming from the US housing market downturn have yet to be acknowledged.
SEC said that banking giants Citigroup and ING Group have deducted $2 billion and $5.6 billion respectively from their balance sheets, unannounced.
Fund manager Michael Holland, talking to Bloomberg, commented: “The smart people are the ones who’ve identified the problems, put them out there in full transparency, and addressed them by raising more capital.
“There is still billions of dollars of crap out there that hasn’t worked itself through the system. Banks need more capital to work that all out.”
The unacknowledged write-downs can be added to the $344 billion losses already declared by banks.
According to figures from the International Monetary Fund, total credit crunch write-downs could eventually reach $1 trillion.