Basel and banks not yet ready for IFRS 9

Basel 230x150
By Owen Sanderson
30 Mar 2017

The Basel Committee said on Wednesday that it had not figured out how the regulatory capital regime could deal with the IFRS 9 accounting rules set to come in next year and backed a transitional period, as few banks are ready for the ‘capital shock’ that could result.

The new rules changed how banks recognise credit losses. Instead of looking at possible losses in the year ahead, banks are supposed to look at the losses possible in the lifetime of an asset. That means, when macro conditions worsen, banks need to recognise the whole deterioration of ...

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