IFRS 9 Implementation from the Perspective of Banking Supervisors

The paper explores the role of banking supervisors with respect to banks’ implementation of IFRS 9. It discusses: the benefits associated with IFRS 9 as well as the main challenges from banking soundness and risk management perspectives; the role that banking supervisors should play in achieving a robust implementation of IFRS 9; and steps that can be taken to implement IFRS 9 in a proportionate and sound manner while minimizing procyclicality. It argues that authorities should consider introducing a transition period to provide sufficient preparation time for banks and banking supervisors, with an appropriate sequencing of key tasks to be completed; IFRS 9 should be implemented in a proportionate and sound manner; and regulatory provisioning systems used as prudential backstop should be maintained until supervisors have gained sufficient experience with IFRS 9.