At the heart of the health crisis, the banks in scattered order on the risk analysis

Posted on Nov 24, 2021, 5:30 PMUpdated Nov 24, 2021, 5:42 PM

A time bomb or a wet firecracker? Difficult to get a clear idea of ​​the presence of risky loans in the balance sheets of banks after nearly two years of health crisis … and that may well be the problem. Because who says poor readability of the risk, also says that the banks may not have spent enough provisions to withstand possible defaults.

A report from the European Banking Authority (EBA) published on Wednesday and devoted to the implementation of new accounting standards (IFRS 9) specifically points to the lack of readability of the risk, exacerbated by the unprecedented situation caused by the Covid-19. Pellets, the authority denounces questionable calculation methods and the lack of harmonization between the different establishments. And she calls on supervisors – who monitor banks’ behavior – to “a closer look.”

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