Supervisory Roles in Loan Loss Provisioning in Countries Implementing IFRS

Supervisory Roles in Loan Loss Provisioning in Countries Implementing IFRS
Author: Ellen Gaston
Publisher: International Monetary Fund
Total Pages: 41
Release: 2014-09-15
Genre: Business & Economics
ISBN: 1498393659
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Countries implementing International Financial Reporting Standards (IFRS) for loan loss provisioning by banks have been guided by two different approaches: International Accounting Standards (IAS) 39 and Basel standards. This paper discusses the different accounting and regulatory approaches in loan loss provisioning, and the challenges supervisors face when there are different perspectives and lack of guidance from IFRS. It suggests actions that supervisors can take to help banks meet regulatory and capital requirements and, at the same time, comply with accounting principles.

Expected Credit Loss Modeling from a Top-Down Stress Testing Perspective

Expected Credit Loss Modeling from a Top-Down Stress Testing Perspective
Author: Mr.Marco Gross
Publisher: International Monetary Fund
Total Pages: 47
Release: 2020-07-03
Genre: Business & Economics
ISBN: 1513549081
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The objective of this paper is to present an integrated tool suite for IFRS 9- and CECL-compatible estimation in top-down solvency stress tests. The tool suite serves as an illustration for institutions wishing to include accounting-based approaches for credit risk modeling in top-down stress tests.

Accounting discretion of banks during a financial crisis

Accounting discretion of banks during a financial crisis
Author: Mr.Luc Laeven
Publisher: International Monetary Fund
Total Pages: 43
Release: 2009-09-01
Genre: Business & Economics
ISBN: 1451873549
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This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.

Audits of Banks

Audits of Banks
Author: American Institute of Certified Public Accountants. Banking Committee
Publisher:
Total Pages: 220
Release: 1984
Genre: Business & Economics
ISBN:
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Effects of Bank Capital on Lending

Effects of Bank Capital on Lending
Author: Joseph M. Berrospide
Publisher: DIANE Publishing
Total Pages: 50
Release: 2011-04
Genre: Business & Economics
ISBN: 1437939864
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The effect of bank capital on lending is a critical determinant of the linkage between financial conditions and real activity, and has received especial attention in the recent financial crisis. The authors use panel-regression techniques to study the lending of large bank holding companies (BHCs) and find small effects of capital on lending. They then consider the effect of capital ratios on lending using a variant of Lown and Morgan's VAR model, and again find modest effects of bank capital ratio changes on lending. The authors¿ estimated models are then used to understand recent developments in bank lending and, in particular, to consider the role of TARP-related capital injections in affecting these developments. Illus. A print on demand pub.