Descriptions
Non-performing loans (NPLs) have reached, or are reaching, systemic levels in many countries. The resolution of such NPLs is a complex and costly process. Bank NPL problems tend to emerge after credit booms or protracted periods of low growth. NPLs crowd out new lending, eroding both the profitability and solvency of banks.
The aim of this course is to help supervisors identify potential problem loans and the level of losses or provisions that are appropriate, before they become a material issue for a bank, or the financial system. Participants will be shown techniques on how to undertake problem loan and provision adequacy reviews, in order to ensure banks have correctly identified the value of such assets and the underlying security, and to ascertain whether they are following the correct recovery strategies.
The course will also cover the key elements and the main implementation challenges of the new IFRS 9 Expected Loss provisioning standard. This will include discussion of modelling approaches, multiple economic scenarios, criteria for stage transfers, key areas of judgement under the standard and latest global bank practice on IFRS 9 during 2018/19. This will enable supervisors to undertake IFRS 9 preparedness and on-going implementation reviews for their banks, and also learn about the key areas of IFRS 9 they will need to challenge their banks on.
