Loan loss dynamics

The International Accounting Standards Board unveiled a new expected loss approach in November, following criticisms of the current incurred loss model. But European regulators have declared their preference for dynamic provisioning – and have even threatened to mandate such an approach if the accounting bodies do not introduce it themselves. Which side will blink first? By Duncan Wood

ian-wright

When leaders of the Group of 20 countries met in London at the start of April, one of their chief concerns was pro-cyclicality – an array of forces that served to magnify the severity of the financial crisis. They arrived at the meeting armed with a report from the Financial Stability Board (FSB) blaming loan-loss accounting for part of the problem and calling for new standards to recognise losses earlier and thereby dampen down future crises. The G-20 endorsed that call, and after seven months

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here