To illustrate the subjective character of the current incurred loss model, I can draw from our experience at the Dutch Central Bank. We are currently executing a so-called Asset Quality Review. In this review we’re also evaluating the processes that lead to adequate levels of loan loss provisioning.
A number of the significant emerging market economies have witnessed a slowdown, and have contributed to the most recent downward revision by the IMF of global growth by 0.2 percentage points to 3.1% and 3.8% for 2013 and 2014, respectively.