In the EU, the new capital framework for banks that came into effect on 1 January 2014 (what is known as the “CRR/CRD IV”), and the supervisory approach within the Single Supervisory Mechanism (SSM), is aimed at harmonising prudential requirements and practices for all EU banks. This is commonly referred to as the “single EU rulebook” or the “single supervisory model”.
The coexistence of different accounting frameworks would obviously be inconsistent with this objective. Nevertheless, the ECB understands that the International Accounting Standards Board (IASB) may have to go towards the finalisation of International Financial Reporting Standard (IFRS) 9, even if a broader agreement cannot be achieved. To pick out one particular issue, the ECB considers the more forward-looking loan-loss provisioning as a positive development.