IFRS 9 implementation by EU institutions : 2023 monitoring report

This report summarises the main findings arising from the EBA's IFRS 9 benchmarking analyses of the data and information collected on HDPs within the third ad hoc data collection on IFRS 9, which complements the observations already included in the last IFRS 9 monitoring report published in November 2021. Since the date of the first implementation of IFRS 9, institutions have made significant progress in the implementation of their ECL impairment models, which have generally enabled the effective recognition of ECL by evaluating a range of possible outcomes also considering forward-looking information. During the COVID-19 crisis, for instance, these models permitted setting aside additional cushions of credit loss provisions based on the expectation of a rapid deterioration in the macroeconomic conditions, without waiting for the occurrence of a specific credit loss event, as it was requested by IAS 39 (incurred loss model). Significant efforts and investments have been made by institutions to implement these models, creating the infrastructure and adopting the practices needed to meet the requirements of IFRS 9.