IFRS 9 loss rules distracting banks from models and data
Banks neglecting necessary work on data and model governance, warn tech vendors
Banks are spending too much time worrying about how to model expected losses under International Financial Reporting Standard 9 (IFRS 9) and are neglecting critical issues of data and model governance, warn technology vendors.
In contrast with previous rules, IFRS 9 ushers in an ‘expected loss’ accounting regime for assets subject to impairment, such as loans. This means banks must take provisions for 12-month expected credit losses from the moment an asset is originated or purchased. If the
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