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Banking Supervisors Tracing the Transition to IFRS 9

Author

Listed:
  • Attila Háda

    (Magyar Nemzeti Bank)

Abstract

The paper presents the supervisory approach of the transition to IFRS 9, implemented in the credit institution sector from 1 January 2018. The author evaluates the impacts of the transition and describes the IFRS-specific items that require a different supervisory approach. One of the conclusions of the paper is that transition to IFRS9 had no major influence on credit institutions’ capital adequacy situation. When assessing the objective of fair valuation and hedge accounting, it may be stated that those essentially support forward-looking, risk-based supervision. As a result of the introduction of the new impairment rules, prudential and accounting impairment approximated each other, but the management of expected losses not sufficiently covered by impairment is not explicit, and the author also makes a recommendation for a potential solution.

Suggested Citation

  • Attila Háda, 2019. "Banking Supervisors Tracing the Transition to IFRS 9," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(4), pages 77-111.
    • Handle: RePEc:mnb:finrev:v:18:y:2019:i:4:p:77-111
    as

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    File URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-18-4-st4-hada.pdf
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    References listed on IDEAS

    as
    1. Gebhardt, Günther & Novotny-Farkas, Zoltán, 2018. "Comparability and predictive ability of loan loss allowances: The role of accounting regulation versus bank supervision," CFS Working Paper Series 591, Center for Financial Studies (CFS).
    2. László Seregdi & János Szakács & Ágnes Tõrös, 2015. "Micro- and macroprudential regulatory instruments compared across the European Union," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 14(4), pages 57-86.
    3. Tamás Szücs & József Ulbert, 2017. "Role and Measurement of Fair Valuation in the Hungarian Credit Institution Sector," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(3), pages 51-73.
    4. Bholat, David & Lastra, Rosa & Markose, Sheri & Miglionico, Andrea & Sen, Kallol, 2016. "Non-performing loans: regulatory and accounting treatments of assets," Bank of England working papers 594, Bank of England.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    IFRS9; banking supervision; impairment; fair valuation; hedge accounting;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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