On Wednesday 12 July, the committee on economic and monetary affairs of the European Parliament supported the creation of a five-year phase-in period, to run from January 2018, in the application of the revised international information standard IFRS 9.
The aim is to limit the negative impact of the new standard on banks that would result from an increase in expected credit losses, leading to a fall in capital ratios.
“Non-performing assets should not be added back to the capital, losses that are now certain should not be allowed to disappear. We need to ensure that incurred but not reported losses should not be taken into account, they need to be subtracted from the eligible capital”, said Peter Simon (S&D, Germany), rapporteur on this dossier, in a Parliament press release.
The negotiations between the Parliament and the Council of the EU will start in the autumn, the member states having adopted their position in mid-June (see EUROPE 11810). The starting positions of the two co-legislating institutions are relatively close together, particularly on the scope of the transitional period. (Original version in French by Mathieu Bion)