Raiders of the loss arc
Regulators are looking at ways to remove pro-cyclicality from accounting standards, with some advocating the scrapping of incurred loss models in favour of dynamic provisioning. Accountants have their doubts - but will they be able to resist pressure from prudential supervisors? Duncan Wood investigates
The Iberian lynx, the Caspian seal, the grey-faced sengi and the incurred loss model of loan provisioning - all are critically endangered, but it could be the last that is wiped from the face of the planet soonest. According to politicians and regulators, the current accounting standard is a dangerous pest that has added to the strain on banks during the worst crisis in living memory. It is now
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