UK banks' ECL scenarios vary

The big four UK high street banks use very different economic scenarios to estimate the amount of cash they need to set aside to cover loan defaults.

Lenders employ an array of forward-looking simulations to size expected credit loss (ECL) provisions under IFRS 9 accounting. These are unique to each bank, meaning the number of, and economic assumptions featured in, these scenarios vary.

Barclays uses five scenarios, Lloyds four, HSBC six and RBS five. Each bank uses one baseline scenario they

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: