BIS calls for ‘heightened supervisory scrutiny’ of Level 3 assets
The Bank for International Settlements published a paper this week in which it suggested that supervisory authorities might need to introduce ‘prudential backstops’ to ensure that banks are valuing Level 3 assets appropriately.
The Level 3 label applies under IFRS 9 accounting standards — and under US GAAP — to the assets on a bank’s balance sheet that are most difficult to value.These assets sit in contrast with Level 1 and Level 2 assets, for which fair value is based ...
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