Banks seek capital pill for accounting headache
IFRS 9 loan loss provisions should be offset by reduction in capital, banks argue
Banks say they ought to receive a cut in credit risk capital requirements to reflect the larger loan loss provisions they will have to hold from 2018, in an argument that is finding a sympathetic ear among accounting experts and some regulators.
But there is deep scepticism over whether regulators at the Basel Committee on Banking Supervision will agree – and even if they do, the changes may not happen quickly enough.
At the moment, losses on financial assets subject to impairment are not
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