Banks seek capital pill for accounting headache

IFRS 9 loan loss provisions should be offset by reduction in capital, banks argue

pill-bottles
Capital cut could relieve pain of IFRS 9

Banks say they ought to receive a cut in credit risk capital requirements to reflect the larger loan loss provisions they will have to hold from 2018, in an argument that is finding a sympathetic ear among accounting experts and some regulators.

But there is deep scepticism over whether regulators at the Basel Committee on Banking Supervision will agree – and even if they do, the changes may not happen quickly enough.

At the moment, losses on financial assets subject to impairment are not recogn

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