2018_11_12_ECO_german

Germán López Espinosa gave a presentation at discussion paper on lecture entitled "The new bank provisioning standards: Implementation challenges and financial stability implications", organized by the Bank of Spain, BIS and CEMFI on October 18 and 19. organized bythe Bank of Spain, BIS and CEMFI on October 18 and 19, to which they invited as speakers the world's leading experts on Bank Provisions under the new model expected loss.

The presentations were by invitation and were attended by academics and professionals, among others, from the Bank of Spain, Bank of England, BIS, CEMFI, EBA, ESMA, Federal Reserve Bank of New York, Financial Stability Board, Ohio State University and Stern School of Business (New Your University).

The academic from the University of Navarra analyzed the quality of the information published by banks in the first half-yearly statements in which they have applied the new rule, IFRS 9, which has come into force as of January 1, 2018 worldwide. To this end, it studied the half-yearly accounts of 41 large banks worldwide and noted that there are reporting deficiencies in the new model expected loss governing IFRS 9. Specifically, in the 2018 annual accounts, banks should improve the information on the prediction of macroeconomic scenarios, the probabilities associated with them, the macroeconomic thresholds they use for the classification of loans as doubtful (stage 2), the impact on provisions of changes in macroeconomic scenarios and the non-linear nature of the probabilities of default.

Germán López Espinosa is Professor of the School of Economics at the University of Navarra and Director of the Master's Degree in Banking and Financial Regulation taught at Campus in Madrid.