Lending agreements may contain certain sustainability-linked features that can modify the contractual cash flows via the interest - shall the borrowers meet or fail to meet the objectives set by the loan agreement. IFRS 9 provides that in order to measure the financial assets at amortised cost,...

In recent years, banks have constantly faced new risks that need to be assessed. The COVID-19 pandemic itself revealed that health risks and related restrictions can threaten the solvency of borrowers. After this threat was managed with the help of public support, a stream of other novel risks...