At the end of each quarter, just before they report their finances to the public, big banks pay back a bunch of the money they've borrowed. That way, it doesn't look like they're relying so heavily on debt. Then, when the next quarter starts, they borrow a bunch more money.
This morning's WSJ reports:
A group of 18 banks—which includes Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc.—understated the debt levels used to fund securities trades by lowering them an average of 42% at the end of each of the past five quarterly periods, the data show.
The finding is based on borrowing in the repo market, a huge source of short-term loans for banks. They use the money they've borrowed on the repo market to make bets on stocks and bonds. Banks got into trouble in the crisis in part because they relied too heavily on borrowed money.
The banks' use of repo loans is a bit different than "Repo 105," the trick Lehman Brothers used to mask its reliance on borrowed money; in that case, Lehman pretended like it would never have to pay back the money it borrowed on the repo market.