Put plainly, for some institutions, these tougher accounting requirements come on top of those resulting from the Basel III reforms – even if there are bound to be some overlaps. It is precisely for this reason that I believe it makes sense to introduce the IFRS 9 requirements incrementally. The resolvability of institutions represents yet another challenge.
Following the first few resolution cases this summer, there was justifiably much talk of the lessons to be learnt from them. Indeed, these are important. However, we must not lose sight of challenges elsewhere; for, in a resolution case, there absolutely needs to be a sufficient capital buffer for a bail-in.