-76-
sheets, FNBC valued its swaps at midmarket values and reflected
its credit and administrative costs adjustments in a reserve
account. Copies of these reports were sent to senior management,
the OCC, and the FRB.
FNBC’s upper management did not rely upon any of the
adjustments used for tax purposes. In making presentations to
its Board Examining Committee on the profitability and status of
its swaps business, FNBC relied on midmarket values. FNBC
reported to its Board Examining Committee that it made a
reasonable profit from the difference between the swaps market
and the customer.30
5. Financial Reporting and Pricing
Swaps dealers such as FNBC valued their swaps for financial
reporting and pricing purposes. FNBC did not rely upon its
credit adjustments in pricing its swaps.
I. The G-30
1. Overview
The G-30 is a private, nonprofit international body that
comprises very senior representatives of the private and public
sectors and academia. It was organized to deepen understanding
of international economic and financial issues and to examine the
choices available to market practitioners and policymakers. It
30 FNBC also did not rely upon its credit adjustments to set
employee bonuses.
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