Featured Product

    PRA Letter on Adoption of Recommendations of ECL Disclosures Taskforce

    January 16, 2019

    The PRA Executive Director Victoria Saporta wrote a letter to CFOs of select firms informing them about the good disclosure initiative of the Taskforce on Disclosures about Expected Credit Loss (ECL). This letter was sent to the firms that nominated themselves to participate in the ECL initiative of the Taskforce. PRA encouraged these firms to make as much progress as possible in adopting the recommendations of the Taskforce in their next annual report. PRA will from time to time ask these firms to provide an update on their adoption plans and for a progress report against those plans. PRA expects these firms to be looking to adopt the recommendations of the report in full.

    The letter highlighted the importance of good market disclosure about IFRS 9 expected credit loss accounting (ECL) at accounting period-ends. There seems to be a widespread agreement that such disclosures need to be comprehensive, appropriately focused, and at the right level of granularity, in addition to being reliable and noticeably similar from firm to firm. However, there seems to be much less agreement on what those terms mean in practice. Thus, PRA had decided, last year, to ask preparers and market participants to work together (as the Taskforce on Disclosures about Expected Credit Loss) to try to reach a consensus on what good disclosure looks like. PRA, FCA, and the Financial Reporting Council have since been sponsoring the Taskforce’s work. The Taskforce’s first report on recommendations on a comprehensive set of IFRS 9 ECL disclosures was published in November 2018. Although the Taskforce believes all the recommendations could be adopted in full within two or three years, it accepts that not all firms will be able to provide all the disclosures described in full initially. In this letter, PRA includes additional comments on two matters the report specifically mentions as areas on which the Taskforce might develop more detailed recommendations in due course—that is, disclosures for measurement uncertainty and sensitivity and disclosures for the use of Monte Carlo approaches.

     

    Related Link: Letter

    Keywords: Europe, UK, Banking, Accounting, ECL, Disclosures, IFRS 9, Taskforce, FCA, FRC, PRA

    Featured Experts
    Related Articles
    News

    FSB Examines Financial Stability Aspects of Bigtech and Cloud Services

    FSB published two reports that consider the financial stability implications from the offering of financial services by bigtech firms and the adoption of cloud computing and data services across a range of functions at financial institutions.

    December 09, 2019 WebPage Regulatory News
    News

    APRA Specifies Capital Treatment of Equity Investments in ABGF

    APRA published a letter to the authorized deposit-taking institutions outlining the regulatory capital treatment of their equity investments in the Australian Business Growth Fund (ABGF).

    December 09, 2019 WebPage Regulatory News
    News

    EBA Publishes Action Plan on Sustainable Finance

    EBA published the Action Plan on sustainable finance for banks.

    December 06, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: Second Update for December 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to three questions under the Capital Requirements Regulation (CRR) and the second Payment Services Directive (PSD 2).

    December 06, 2019 WebPage Regulatory News
    News

    APRA Publishes Proposal to Increase Transparency of Banking Data

    APRA proposed to substantially increase the volume and breadth of data it makes publicly available on authorized deposit-taking institutions, including banks, credit unions, and building societies.

    December 05, 2019 WebPage Regulatory News
    News

    ESMA Consults on Guide to Internal Controls for Credit Rating Agencies

    ESMA launched a consultation on the guidelines on internal controls for credit rating agencies (CRAs).

    December 05, 2019 WebPage Regulatory News
    News

    EU Finalizes Directive and Prudential Rules for Investment Firms

    EU published, in the Official Journal of the European Union, the Directive (2019/2034) and Regulation (2019/2033) on the prudential requirements and supervision of investment firms.

    December 05, 2019 WebPage Regulatory News
    News

    OSFI Revises Guideline on Principles for Management of Liquidity Risk

    OSFI finalized Guideline B-6 on the principles for the management of liquidity risk.

    December 05, 2019 WebPage Regulatory News
    News

    ESAs Publish Draft Amendments to Bilateral Margin Requirements

    ESAs published joint draft regulatory technical standards to amend the Delegated Regulation on the risk mitigation techniques for non-cleared over-the-counter (OTC) derivatives as well as a joint statement on the introduction of fallbacks in OTC derivative contracts and the requirement to exchange collateral.

    December 05, 2019 WebPage Regulatory News
    News

    RBNZ Releases Final Decisions Related to Capital Review for Banks

    RBNZ released a paper that sets out its final decisions following the comprehensive review of its capital framework for banks, known as the Capital Review.

    December 05, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4279