Such disclosures signal to the users of financial statements the differences between dynamic provisions representing  BIS central bankers’ speeches  9  loss expectations based on historical data and specific provisions for losses actually identified in the loan portfolio.
Interaction with the accounting standards One question which will invariably arise on implementing dynamic provisions would be whether the concept is in accordance with the international accounting standards? Thus far, the answer is negative since the concept of dynamic provisions deviates from the principle of incurred losses as followed currently in accounting.