These delays resulted in the recognition of credit losses that were widely regarded as ‘too little, too late’, and gave rise to questions of procyclicality by spurring excessive lending during the boom and forcing a sharp reduction in the subsequent bust.
The development of the ECL accounting framework is consistent with the call by the leaders of the Group of Twenty (G20) in April 2009 to strengthen accounting recognition of loan loss provisions by incorporating a broader range of credit information.