Basel proposals could break deadlock on loan provisions

The Basel Committee on Banking Supervision has suggested a potentially impasse-breaking set of adjustments to the loan-loss accounting standard proposed last November by the London-based International Accounting Standards Board (IASB) (Risk December 2009, pages 31–33; March 2010, pages 49–51). The draft accounting rules would abandon the incurred-loss approach in favour of one based on expected loss.

Banks and regulators broadly welcomed the IASB proposal, but are concerned the rules could be