IFRS 9 implementation by EU institutions : monitoring report

This report summarises the findings arising from the EBA's investigations since the publication of its last report in December 2018. These findings are meant to assist supervisors' evaluation of the quality and consistency of the ECL frameworks implemented by EU banks, in order to contribute to a high-quality and consistent application of the IFRS 9 standard. These findings will also be used by the EBA to continue its discussions on IFRS 9 implementation with banks, auditors and standard-setters. As communicated when publishing the IFRS 9 roadmap, the benchmarking exercise will be conducted under a medium-to-long-term perspective and the findings in this report can certainly not be considered as being the final status of the reflections. Banks have generally made significant efforts to implement the IFRS 9 standards and adapt their systems to the requirements. The high level of judgment embedded in the standard keep it open to a wide variety of practices at this stage. No single practice appears to be a strong driver of the ultimate levels of provisioning. On top of the limited experience and history to date, the COVID-19 pandemic has required some rapid adjustments to models that could not have been tested over a long period of time. Close monitoring and investigations from a regulatory and supervisory perspective will hence be needed.