Banks must now incorporate structured investment vehicles on their balance-sheets, for instance.
The backup fund will not save troubled structured investment vehicles, or SIVs, that hold billions of dollars in packaged loans, though it could delay their demise.
"This will ensure that there is no compelled liquidation of the assets in the SIVs," said Armin Kloss, a WestLB spokesman, referring to structured investment vehicles.
Banks themselves engaged in a binge of creating off-balance-sheet structures, most notably with so-called SIVs (structured investment vehicles).
A carefully structured investment plan can be a means of achieving long-term or short-term goals.
By enforcing existing bank regulatory laws and FASB principles, end the dangerous Structured Investment Vehicles.
The result: asset-backed commercial paper and its associated conduits, structured investment vehicles, special conduits whose structure makes them riskier.
The fund, a so-called structured investment vehicle, ran into trouble because it invests in long-term assets, like mortgage-backed securities, by borrowing cash through commercial paper.
Meanwhile, several structured investment vehicles, which issue short-term notes to invest in longer-term securities with higher yields, were struggling to refinance.
The backup fund will not help troubled structured investment vehicles survive.
B&B said it had only a small exposure to CDOs and other structured investment vehicles.
