Euromoney (February Issue)
2017/ 02/ 22 by jd in Global News
“New accounting rules requiring banks to take upfront charges against possible losses through the full life of a loan promise damaging pro-cyclicality.” IFRS 9 comes into effect next January. It “will require banks to recognize expected loan losses even before borrowers miss a single interest or principal repayment.” This major change “will hit both reported earnings and capital even if a borrower manages to remain current on debt servicing.” Uncertainty abounds, but it looks like “US and Japanese banks will be subject to their own variant, current expected credit loss (CECL), under US GAAP.”
Tags: Accounting rules, Banks, Borrowers, Capital, CECL, Earnings, GAAP, IFRS 9, Interest, Loan losses, Principal, Repayment, Upfront charges
