validation of banks’ internal approaches, Pillar II principles and supervisory reporting), one cannot fail to note that substantive progress is being made. Of course, a major challenge in this field remains compliance by individual supervisors with the non-binding deliberations of the Level 3 committees. Transparency of implementation measures by supervisory authorities is expected to play an important role in this respect.
The incurred loss model of provisioning came under heavy criticism, as it resulted in too little provisions too late. In the midst of public backlash, the International Accounting Standards Board was faced with the need to review the provisioning methodology to make it more forward-looking. This triggered the development of the expected loss model under IFRS9. IFRS9 is a complex accounting standard.