According to a front page story in the Wall St Journal, the big banks reduce their short term borrowing at the end of each quarter to make the end of quarter balance sheet look better. Bank of America, Deutsche Bank and Citigroup are named. They call it "window dressing".
Why do we care? Simple, a bank's ratio of debt to capital in a good measure of the bank's soundness. Too much debt, too little capital, and any small setback, like a loan default can break the bank. Bank runs out of money and has to fold. Investors in the bank loose all their money and FDIC pays off the depositors.
According to the Journal article, the banks are engaging in deceptive practices to could suck in unwary investors.
We REALLY REALLY need to clean up the accounting business in this country so that published financial documents mean something. In this case, the rules ought to be changed to require the banks to publish their average debt, averaged over the entire quarter, not just their debt on one special day out of the quarter.
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