ProPublica: Banks didn't have proper reserves

ProPublica has an interesting story that outlines how accounting firms failed to notice that banks had not set aside enough reserves to cover losses in the years leading up to the financial crisis.

One interesting nugget from the story: "Between 2004 and 2007, federal inspectors detected 36 such auditing mistakes at six of the biggest accounting firms, as well as numerous other errors, according to a ProPublica review of board records. KPMG staffers, for example, 'failed to test the accuracy of loan delinquency data' in a 2007 audit of a lender, according to one inspection report."

ProPublica is a nonprofit journalism organization that specializes in investigative reports.

-- Ylan Q. Mui