SAFE Policy Lecture: David Grünberger
Titel: Expected Credit Loss Accounting: A Key to Financial Stability?
Speaker: David Grünberger, Deputy Head of Division Integrated Financial Markets, Austrian Financial Market Authority (FMA)
Moderator: Günther Gebhardt, Emeritus Chair of Accounting and Auditing, Goethe University Frankfurt
Both the financial and the sovereign crises hit the real economy as soon as banks impaired their loans, thus tightening their capital ratios. Commentators quickly blamed sluggish and old-fashioned “incurred loss” accounting rules and claimed that a more cautious approach would have smoothed the impacts. Early in 2009, the G20 appealed to “strengthen accounting recognition of loan-loss provisions by incorporating a broader range of credit information” and to “improve accounting standards for provisioning”. The International Accounting Standards Board reacted with an expected credit loss standard. This is an accounting approach that has never been tested empirically, but which will go live in early 2018. On the basis of historical rating data, this lecture explores what can be expected in terms of financial stability and how to get there. More importantly it also addresses what cannot be expected.
Dr. David Grünberger, CPA heads the Accounting Enforcement Unit at the Austrian Financial Market Authority. He is a certified auditor and an accounting researcher. His team is responsible for enforcing International Financial Reporting Standards (IFRS) and solving complex accounting issues in the area of banking supervision. He serves in several accounting committees and working groups within European Securities and Markets Authority and the ECB, lectures on IFRS at two Austrian universities and has authored many publications in the accounting area.