If the general price level is estimated to be rising more rapidly than is in fact the case, then we are simultaneously understating growth in real GDP and productivity, and real incomes and living standards are rising faster than our published data suggest.
Given that the work in this field is on-going, the ECB urges the IASB to continue working together with the Basel Committee on Banking Supervision with a view to developing an operational solution to a more forward-looking provisioning approach.