In particular, the IASB issued the IFRS 9 based on the expected current loss model while the FASB issued its own Standard introducing the notion that provisions should cover the whole expected loss of the loan from inception. Regardless of the technical differences between the two, the crucial element is that both use as a key element the expected loss concept to account for credit losses. In any event, it is fair to say that the new provisioning standards introduce major changes compared to pre-crisis practices. One important change refers to the way that credit loss provisions should be recognised in a timely fashion because it was perceived that the incurred loss model, in force when the crisis took place, considered credit losses “too little  3/7  and too late in the cycle”, and that affected directly the amount of provisions set aside by banks (deemed very small and highly insufficient). A direct consequence of the implementation of the expected loss model is a more timely recognition of credit losses together with an envisaged improvement in banks’ credit risk management. These two elements are expected to positively and significantly contribute to the stability of the banking system. Nonetheless, this assumption largely depends on banks’ awareness and commitment in terms of their ability and willingness to appropriately capture the risk embedded in their loan portfolio. All in all, to understand the performance of the loan book, one has first to look at the specific process of granting loans.
Peter Pang: Promoting the prudent development of m-payment in Hong Kong Speech by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the “Tapping the potential of mobile commerce with innovation” Conference, Hong Kong, 18 September 2014. *  *  *  Distinguished guests, ladies and gentlemen, 1. I would like to thank the South China Morning Post for inviting me to talk about the exciting topic of mobile commerce. I. (a)  Prelude – a quick recap of the technology evolution The past  2. Mobile technology has come a long way over the past two decades. I recently came across an article that indicates that in an upcoming technology exhibition in London, a futuristic smartphone will be put on show. It offers a wide range of computing features, and has a stylish screen. If you carry it on the street today, I am quite sure it will have a “wow effect” no less than any other new model that is on offer right now. 3. Don’t get me wrong – I am not talking about any latest phone models. I am talking about the first “smart-phone” in the world, the IBM Simon, which went on sale in the summer of 1994, and would be put on display in London’s Science Museum in October this year. 1 4. The model disappeared from the market around two years after its launch.