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Supervisory Roles in Loan Loss Provisioning in Countries Implementing IFRS


  • Ellen Gaston
  • In W Song


Countries implementing International Financial Reporting Standards (IFRS) for loan loss provisioning by banks have been guided by two different approaches: International Accounting Standards (IAS) 39 and Basel standards. This paper discusses the different accounting and regulatory approaches in loan loss provisioning, and the challenges supervisors face when there are different perspectives and lack of guidance from IFRS. It suggests actions that supervisors can take to help banks meet regulatory and capital requirements and, at the same time, comply with accounting principles.

Suggested Citation

  • Ellen Gaston & In W Song, 2014. "Supervisory Roles in Loan Loss Provisioning in Countries Implementing IFRS," IMF Working Papers 14/170, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:14/170

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    References listed on IDEAS

    1. Sarawan Angklomkliew & Jason George & Frank Packer, 2009. "Issues and developments in loan loss provisioning: the case of Asia," BIS Quarterly Review, Bank for International Settlements, December.
    2. Jennifer A. Elliott & Aditya Narain & Ian Tower & José Vinãls & Pierluigi Bologna & Michael Hsu & Jonathan Fiechter, 2010. "The Making of Good Supervision; Learning to Say "No"," IMF Staff Position Notes 2010/08, International Monetary Fund.
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    Cited by:

    1. Gebhardt, Günther & Novotny-Farkas, Zoltán, 2018. "Comparability and predictive ability of loan loss allowances: The role of accounting regulation versus bank supervision," CFS Working Paper Series 591, Center for Financial Studies (CFS).
    2. Ozili, Peterson K, 2017. "Paying Bank Risk Professionals to Lie About Bank Loan Loss Provisioning Process," MPRA Paper 75354, University Library of Munich, Germany.
    3. de Haan, Leo & van Oordt, Maarten R.C., 2018. "Timing of banks’ loan loss provisioning during the crisis," Journal of Banking & Finance, Elsevier, vol. 87(C), pages 293-303.
    4. Pool, Sebastiaan & de Haan, Leo & Jacobs, Jan P.A.M., 2015. "Loan loss provisioning, bank credit and the real economy," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 124-136.
    5. Ozili, Peterson K, 2017. "Bank Loan Loss Provisions Research: A Review," MPRA Paper 76495, University Library of Munich, Germany.
    6. Chaudhry, Sajid Mukhtar & Mullineux, Andrew & Agarwal, Natasha, 2015. "Balancing the regulation and taxation of banking," International Review of Financial Analysis, Elsevier, vol. 42(C), pages 38-52.
    7. Krzysztof Czerkas, 2016. "The foreign currency mortgage loans in the Polish banking sector and its possible macroeconomic and political consequences," Lodz Economics Working Papers 8/2016, University of Lodz, Faculty of Economics and Sociology.
    8. repec:eee:bracre:v:50:y:2018:i:5:p:539-558 is not listed on IDEAS
    9. repec:dug:journl:y:2017:i:1:p:113-121 is not listed on IDEAS
    10. repec:psl:moneta:2017:42 is not listed on IDEAS
    11. repec:eee:jaecon:v:63:y:2017:i:2:p:454-478 is not listed on IDEAS
    12. Cummings, James R. & Durrani, Kassim J., 2016. "Effect of the Basel Accord capital requirements on the loan-loss provisioning practices of Australian banks," Journal of Banking & Finance, Elsevier, vol. 67(C), pages 23-36.
    13. Rösch, Daniel & Scheule, Harald, 2016. "The role of loan portfolio losses and bank capital for Asian financial system resilience," Pacific-Basin Finance Journal, Elsevier, vol. 40(PB), pages 289-305.
    14. Jochen R. Andritzky, 2014. "Resolving Residential Mortgage Distress; Time to Modify?," IMF Working Papers 14/226, International Monetary Fund.


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