Standard stuff: Timelier provisions may make banks’ profits and lending choppier

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Timelier loan-loss provisions may make earnings and lending choppier

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Stage fright

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Accounting and banks

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IN THE first quarter of 2018 thousands of banks will look a little less profitable. A new international accounting standard, IFRS 9, will oblige lenders in more than 120 countries, including the European Union’s members, to increase provisions for credit losses. In America, which has its own standard-setter, IFRS 9 will not be applied—but by 2019 banks there will also have to follow a slightly different regime.
The new rule has its roots in the financial crisis of 2007-08, in the wake of which the leaders of the G20 countries declared that …

Link to article: www.economist.com/news/finance-and-economics/21731448-new-accounting-rule-credit-losses-about-kick-timelier-provisions-may?fsrc=rss

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