As per a report published by the Wall Street Journal (WSJ), most of the major banks in the US misinterpreted their risk levels.

The repost says that the banks have, in five years, temporarily reduced their risk levels just before reporting their figures. This was done to make the balance-sheet much less riskier than it actually was.

WSJ said that it has been able to reveal this trend by using the data that was available with the Federal Reserve Bank of New York.

The business paper also said that the list included 18 banks. The main players were- Goldman Sachs Group, Morgan Stanley, J. P. Morgan Chase Bank of America and Citigroup.

It said that these reduced their risk levels by as much as 42 per cent at the end of each period. They then increased them in the middle of successive quarters.

None of the above mentioned banks made any comment on this. Fed Reserve also made no comments on the issue.

The report is important since excessive leverage to risky loans was the reason for the collapse of the financial market in 2008.