Dynamic provisioning

Loan loss calculation conundrum

Replacing the incurred loss provisioning model remains high on the agenda of accountants, bankers and regulators. The challenge is to find a way to calculate expected loss that satisfies the diverse objectives of all three camps. Can a compromise be…

Provisioning for the future

A growing number of regulators have highlighted dynamic provisioning as a means of lessening pro-cyclicality in the financial system. José Mar√≠a Rold√°n, director-general of banking regulation at the Banco de Espa√±a and chair of the Standards…

A vicious circle

Regulators are looking at how best to ensure capital adequacy rules are not pro-cyclical. The Basel Committee has proposed changes to its market risk rules, but further, counter-cyclical changes have been suggested. What is being considered and what are…