EBF response to the BCBS Consultative document: Regulatory treatment of accounting provisions – interim approach and transitional arrangements
EBF advisor: Denisa Mularova
Publication date: 12 January 2017
The transition period should not be introducing any phasing before there is clarity on how the prudential framework will be amended long-term.
For jurisdictions applying IFRS 9, the transition regime should apply from 2018. In the period from 1 January 2018 to 31 December 2019 a bank should include in CET 1 capital an adjustment amount of 100 % (coefficient 1).
Should the final framework be in place by 2020, the phasing as envisaged by the Basel Committee could then be adopted which would make more sense given that the phasing-in would take place on the basis of a real impact.
As for the approach to the calculation of the transitional adjustment amount, the EBF supports alternative 3 given its dynamic approach and conceptual relevance.