Q1 results are expected to be publshed mid-April. One leading banking lawyer told The Financial Times: 'Reserving is in chaos.' Rodgin Cohen, senior partner of Sullivan & Cromwell, has been described as the leading US banking lawyer, and he fears that regulators might be using bank provisions as a gauge as to what level of settlement they should aim for. He has said that the record level of regulator fines might mean, for a bank, that 'creating a public reserve for a potential settlement with the government can paint a target on your back'.

Nonsense

The legal provisions are also seen as making a nonsense of some sets of results. Morgan Stanley, for instance, reported US$1b of net income in Q4 of 2014. But, if transfers to and from legal provisions were removed, the actual result would have been a loss of $1.75b.  Source: Financial Times