The FASB and the IASB are finalising two different rules, much to the disappointment of the G20 which wanted a single global rule. An accounting rule forcing banks to set aside capital far earlier for troubled loans will be completed next month and start in 2017, the IASB said.
"I think we will finish deliberations in January. We are practically done and we don't have any more major decisions to make", IASB Chairman Hans Hoogervorst told Reuters.
The FASB is reconsidering its own draft version, with the IASB model as one possibility but the "most likely scenario" for achieving a single rule would be for the US standard-setter to adopt the IASB model, Hoogervorst said. Few believe this will happen given big differences and mounting regulatory pressure for an agreement now that five years have passed since the G20 call was made, with another four years to go before the IASB rule will take effect.
The FASB wants banks to make provisions for full lifetime losses from the first day of the loan, while the IASB has opted for a staged approach with only some provisioning at the start.
Richard Thorpe, senior accounting and auditing advisor to the G20's regulatory task force, the Financial Stability Board, said he would much rather have a single global rule.
Futher reporting © Reuters
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