LONDON, March 17 (Reuters) – An accounting rule introduced after the global financial crisis faces its first big test as banks seek relief in the face of government calls to keep coronavirus-hit borrowers afloat. Since 2018 banks must partly provision for a loan upfront in expectation of losses in its first year. Under the old rule, there was no effective provisioning until there were very late repayments or even default that incurred actual losses. The rule is the accounting sector’s core response to the global financial crisis to avoid banks having to be rescued by taxpayers when loans turn bad en masse in a downturn like the one Britain and other countries now face Known as IFRS9, it is mandatory in over 100 countries, including the European Union and Britain, but not in the United States, where there is a tougher version with full upfront provisioning for expected losses. “Obviously IFRS 9 is an issue for us and all banks in terms of how we recognise any provision,” Alison Rose, chief executive of the Royal Bank of Scotland, said on Tuesday. “I think it’s too early to say how that will evolve,” she told a banking conference. Reuters reported last… Read full this story
- Boris Johnson revives working from home advice to combat omicron
- Coronavirus news from the Bay Area: March 18
- Rentokil slumps after £5.1bn deal makes it world's biggest rat catcher
- FTSE 100 and pound slump as lockdown fears mount
New accounting rule for virus-hit banks faces first big test have 235 words, post on www.reuters.com at March 17, 2020. This is cached page on wBird. If you want remove this page, please contact us.