EBA reports on results of the second impact assessment of IFRS 9

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14 Jul 2017

The European Banking Authority (EBA) has published a report on the results of its second impact assessment of IFRS 9 'Financial Instruments'. For the report, EBA looked at a sample of approximately 50 institutions across the European Union.

The exercise, which follows up on the first impact assessment published in November 2016, has confirmed the EBA's initial observations on the stage of preparation for the implementation of IFRS 9 and the estimated impact of IFRS 9 on regulatory own funds.

On the qualitative side, the report highlights that banks have made further progress on the implementation of IFRS 9 since the previous exercise, but smaller banks are still lagging behind in their preparation compared with larger banks. On the quantitative side, the responses received show that the estimated impact of IFRS 9 is mainly driven by IFRS 9 impairment requirements. The estimated increase of provisions is on average 13% compared to the current levels of provisions under IAS 39.

The full report can be accessed on the EBA website.

In parallel, the EBA also launched a public consultation on its guidelines on uniform disclosure of IFRS 9 transitional arrangements to ensure institutions' Pillar 3 disclosures on capital and leverage ratios are consistent across the EU during the transitional period. More information is available here.

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