EBA urges European banks to step up IFRS 9 preparations

Banks not yet in testing phase face 32 basis point extra capital hit, report finds

Financial preparation
Prepared? The variety of implementations has left some observers 'gobsmacked'

The European Banking Authority (EBA) has used its second impact assessment on a new accounting standard to urge banks to step up their preparations ahead of implementation next year, or face a potential capital shock.

The EBA produced its first impact assessment on International Financial Reporting Standard 9 (IFRS 9) in November last year. That report found 19% of banks were planning parallel runs of IFRS 9 with the existing International Accounting Standard 39 (IAS 39) for a duration of one y