Banks struggle to crack 'very complex nut' of IFRS 9

Move to expected loss impairment regime brings major challenges, say banks and accountants

With perfect hindsight, banks might have been spared the pain of the financial crisis. But in the absence of a crystal ball, magic mirror or time machine, such a level of clairvoyance is hard to achieve. In its absence, banks and regulators have searched for ways of making sure the possibility of future downturns is considered – for instance, by using counter-cyclical capital buffers, more pessimistic modelling assumptions and regular supervisory stress tests.

Accountants are also doing their