I will only mention as examples the discussion in relation to the introduction of the IAS accounting standards for the banking sector, including full fair value accounting for the banking book , as well as the information disclosure of the quarterly results, which will most likely increase the short term volatility of the banking results; the future introduction of the new capital adequacy rules which risks having a negative pro-cyclical impact of the loan-loss provisions on the financial sector.
The concept of dynamic provisioning could be a step in the right direction in this context. BIS Review 14/2003  1  If we disregard in the banks’ accounts from the results the miscellaneous income, including capital gains, the picture of the banking sector appears even more alarming.