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EBA publishes results of the first post-implementation impact assessment of IFRS 9

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22 Dec 2018

Following the first period of application of IFRS 9 'Finacial Instruments' in the European Union, the European Banking Authority (EBA) is scrutinising the effective implementation of the standard by EU institutions and its impact as initially observed. In this context, the EBA has conducted a new exercise on the standard’s impact on EU institutions and has now published a first report that is meant to provide preliminary observations on the first stages of implementation while a deeper analysis is still ongoing.

The post-implementation impact assessment builds on the previous exercises conducted by the EBA before the first application of the new standard published in November 2016 and July 2017. The analysis is now based on actual data reported by banks to competent authorities and supplemented by public disclosures where possible. The sample used for the exercise is the same as the one used in the two previous EBA impact assessments (consisting of 54 institutions across 20 Member States).

Given the complexity of the new standard and the challenges still being faced by banks, it is expected that data accuracy will increase over time. However, the general conclusion can already be drawn that the observations in the report are consistent with the forecasts of the second EBA impact assessment report, in particular in terms of increase in provisions. The EBA notes that the monitoring of IFRS 9 is just starting and the effective impact and implementation of the standard will need to be reviewed through time.

The report is mainly factual and does not include recommendations, however, it does identifiy some areas for ongoing scrutiny and areas for further work from an EBA perspective.

Please click to access the full report on the EBA website.

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