In order to address the procyclical issues, the Basel Committee is working closely with the International Accounting Standards Board (IASB) towards an expected loss approach to loan loss provisioning instead of the current practice of incurred loss approach.
Addressing interconnectedness Interconnectedness among banks, especially the large ones, is sought to be addressed through various measures such as enhanced regulatory framework for global systemic important banks (G-SIBs), prescription of higher asset value correlation under the Internal Ratings Based (IRB) Approach for exposures to large financial institutions with assets of US $ 100 billion and with unregulated institutions.