Deferred Tax Assets For Banks May Be Questioned By Regulators

Deferred tax assets on a bank’s balance sheets have always been a problem for regulators.  Most of the deferred tax assets are currently disallowed for capital purposes.  And now with banks piling up losses and creating deferred tax assets due to net operating loss carryovers regulators are taking a harder look at these assets.  Writedowns of these assets are expected and will more likely hurt regional and community banks.

Here is a great article by Forbes.com that explains the issue further,  U.S. Regulators Squeeze Banks On Future Tax Assets.