Banks in the UK could be collectively holding up to £50 billion ($74.5 billion) in undeclared losses, a new report has indicated.
Research carried out by shareholder group PIRC has indicated that even though these funds do not show up on financiers' balance sheets, they are clearly having an adverse impact on the their ability to lend, the Daily Telegraph reports.
According to PIRC, most of the country's foremost banks are involved in this practice, with HSBC leading the way by holding some £10.4 billion in hidden losses.
Meanwhile, Royal Bank of Scotland is thought to have around £9.4 billion tied up in this way, while Barclays, Lloyds Banking Group and Standard Chartered have £7.3 billion, £2.5 billion and £2.2 billion respectively.
Tim Bush, head of financial analysis at PIRC, said such figures make it clear that the current IASB model of accounting in the UK is not functioning correctly.
By Claire Archer