{"id":1053,"date":"2020-03-30T13:28:57","date_gmt":"2020-03-30T11:28:57","guid":{"rendered":"https:\/\/eaa-online.org\/arc\/blog\/blog\/what-governments-can-learn-businesses-and-regulators\/"},"modified":"2020-03-30T13:28:57","modified_gmt":"2020-03-30T11:28:57","slug":"what-governments-can-learn-businesses-and-regulators","status":"publish","type":"post","link":"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/","title":{"rendered":"What governments can learn from businesses and regulators"},"content":{"rendered":"

Banks and<\/a> businesses have been calling for IFRS 9 Financial Instruments<\/em> to be lifted. The forward-looking ‘Expected Credit Loss’ impairment model of IFRS 9 was introduced to reduce the likelihood that another financial crisis would stifle the banking system. IFRS 9 requires that financial assets such as loans are valued realistically by requiring financial institutions to make the provisions to cover loans to distressed borrowers before they start to default. Because no one can possibly tell under the current conditions whether borrowers will be able to service their loans, it is argued by some<\/a> that it makes no sense to impose IFRS 9 since thiswould require banks to make provisions that will turn out to be way too pessimistic once the Covid-19 crisis has vanished.  Relentless application of IFRS 9 would lead banks to make huge provisions and report significant losses. The Bank of England “gave a strong signal that regulators and auditors would be lenient in interpreting the new rules – and might not yet insist on banks factoring in the impact of Covid-19.” In other words, we freeze the market and sit this out until the Covid-19 crisis is over and protect our financial system against contamination. <\/span><\/p>\n

 <\/p>\n

In light of this swift reaction, I wonder why we did not freeze the movement of people as quickly as we froze bank’s balance sheets, i.e. by late January 2020? Regardless, we did not and as a consequence the Covid-19 crisis looks set to drag on way longer than necessary in Europe, the UK and the USA. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Banks and businesses have been calling for IFRS 9 Financial Instruments to be lifted. The forward-looking ‘Expected Credit Loss’ impairment model of IFRS 9 was introduced to reduce the likelihood that another financial crisis would stifle the banking system. IFRS 9 requires that financial assets such as loans are valued realistically by requiring financial institutions to make the provisions to cover loans to distressed borrowers before they start […]<\/p>\n","protected":false},"author":96,"featured_media":1054,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0},"categories":[1],"tags":[2],"acf":[],"yoast_head":"\nWhat governments can learn from businesses and regulators - ARC<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What governments can learn from businesses and regulators - ARC\" \/>\n<meta property=\"og:description\" content=\"Banks and businesses have been calling for IFRS 9 Financial Instruments to be lifted. The forward-looking ‘Expected Credit Loss’ impairment model of IFRS 9 was introduced to reduce the likelihood that another financial crisis would stifle the banking system. IFRS 9 requires that financial assets such as loans are valued realistically by requiring financial institutions to make the provisions to cover loans to distressed borrowers before they start […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/\" \/>\n<meta property=\"og:site_name\" content=\"ARC\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-30T11:28:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/03\/jb.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"492\" \/>\n\t<meta property=\"og:image:height\" content=\"325\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jan Bouwens\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jan Bouwens\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/\",\"url\":\"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/\",\"name\":\"What governments can learn from businesses and regulators - ARC\",\"isPartOf\":{\"@id\":\"https:\/\/eaa-online.org\/arc\/#website\"},\"datePublished\":\"2020-03-30T11:28:57+00:00\",\"dateModified\":\"2020-03-30T11:28:57+00:00\",\"author\":{\"@id\":\"https:\/\/eaa-online.org\/arc\/#\/schema\/person\/97f6a8f012064477a44acb3059e7b803\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/eaa-online.org\/arc\/#website\",\"url\":\"https:\/\/eaa-online.org\/arc\/\",\"name\":\"ARC\",\"description\":\"Advanced Resources Center\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/eaa-online.org\/arc\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/eaa-online.org\/arc\/#\/schema\/person\/97f6a8f012064477a44acb3059e7b803\",\"name\":\"Jan Bouwens\",\"url\":\"https:\/\/eaa-online.org\/arc\/blog\/members\/96\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What governments can learn from businesses and regulators - ARC","robots":{"index":"noindex","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"og_locale":"en_US","og_type":"article","og_title":"What governments can learn from businesses and regulators - ARC","og_description":"Banks and businesses have been calling for IFRS 9 Financial Instruments to be lifted. The forward-looking ‘Expected Credit Loss’ impairment model of IFRS 9 was introduced to reduce the likelihood that another financial crisis would stifle the banking system. IFRS 9 requires that financial assets such as loans are valued realistically by requiring financial institutions to make the provisions to cover loans to distressed borrowers before they start […]","og_url":"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/","og_site_name":"ARC","article_published_time":"2020-03-30T11:28:57+00:00","og_image":[{"width":492,"height":325,"url":"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/03\/jb.jpg","type":"image\/jpeg"}],"author":"Jan Bouwens","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Jan Bouwens","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/","url":"https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/","name":"What governments can learn from businesses and regulators - ARC","isPartOf":{"@id":"https:\/\/eaa-online.org\/arc\/#website"},"datePublished":"2020-03-30T11:28:57+00:00","dateModified":"2020-03-30T11:28:57+00:00","author":{"@id":"https:\/\/eaa-online.org\/arc\/#\/schema\/person\/97f6a8f012064477a44acb3059e7b803"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/eaa-online.org\/arc\/blog\/2020\/03\/30\/what-governments-can-learn-businesses-and-regulators\/"]}]},{"@type":"WebSite","@id":"https:\/\/eaa-online.org\/arc\/#website","url":"https:\/\/eaa-online.org\/arc\/","name":"ARC","description":"Advanced Resources Center","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/eaa-online.org\/arc\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/eaa-online.org\/arc\/#\/schema\/person\/97f6a8f012064477a44acb3059e7b803","name":"Jan Bouwens","url":"https:\/\/eaa-online.org\/arc\/blog\/members\/96\/"}]}},"jetpack_featured_media_url":"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/03\/jb.jpg","_links":{"self":[{"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/posts\/1053"}],"collection":[{"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/users\/96"}],"replies":[{"embeddable":true,"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/comments?post=1053"}],"version-history":[{"count":0,"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/posts\/1053\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/media\/1054"}],"wp:attachment":[{"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/media?parent=1053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/categories?post=1053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eaa-online.org\/arc\/wp-json\/wp\/v2\/tags?post=1053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}