BCBS Discussion Paper: Regulatory treatment of accounting provisions
EBF advisor: Denisa Mularova
Publication date: 12 January 2017
The regulatory framework must ensure that the same potential losses are not covered both by capital and provisions.
Discussions on the treatment of excess provisioning should be accelerated. The revision of the treatment of accounting provisions cannot take place in blocks without considering all relevant major aspects altogether.
Provisions in excess of 12 months should be considered for capital purposes regardless of the capital method used to calculate capital.
Excesses and shortfalls in provisions should be treated symmetrically both under the standardized approach (STA) and internal ratings-based (IRB) approaches. If this symmetrical treatment is accepted, then the regulatory EL could be useful in providing a basis for such a symmetrical treatment for STA. However it needs further considerations and recalibrations to eliminate overlaps.
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The federation is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
56 Avenue des Arts
+32 2 508 37 11
D-60311 Frankfurt am Main
+49 69 17509942