This is not a sound bite, but it is an ongoing problem that is finally getting some well-deserved attention. What is wrong with this picture?

For years, accounting standards allowed U.S. banks to keep certain loans, such as those linked to risky subprime mortgages, in off-balance sheet vehicles. But members of the Financial Accounting Standards Board (FASB), which sets U.S. accounting rules, have become convinced that approach hid the true risks banks faced from these vehicles, and that standards must be fundamentally altered.

Under FASB’s current thinking, analysts estimate financial institutions could be forced to book $5 trillion, which would most likely include troubled loans.

...Lobbyists for Wall Street are meeting with the Federal Reserve, Treasury Department, SEC and other policy makers to slow FASB down. They say the accounting change would drain much-needed liquidity from their balance sheets at a time when the financial services industry is already in trouble.

...One source on the influential House Financial Services Committee said the changes FASB is considering are “significant and should be analyzed for unintended consequences that could prolong the credit crisis.”

And...

At issue for the banks is debt ranging from car loans to mortgages that were pooled into off-balance sheet funds, repackaged into securities and then portioned off and sold to investors.

Putting the loans into the off-balance sheet vehicles gave banks the leverage and capital to do more business and helped fuel a boom in the housing market that later crumbled.

I suggest reading this whole article. More on this later, and how Enron is a prime example of how powerful industry lobbyists mold government policies that perpetuate massive fraud ... legally.