Expected credit losses of banks in Europe in a troubled macroeconomic environment – Irish context
Over the past three years, the banking sector has had to endure numerous crises, including Covid-19 and the war in Ukraine. What do the 2023 interim results of the 26 largest banks in Europe indicate about the impact on Expected Credit Losses (ECL) in this unusual environment?
This benchmarking study analysed the 2023 interim reports of 26 banks in 11 European countries, to better understand the impact of financial turbulence and ongoing geopolitical crises on their Expected Credit Losses.
The study mainly focuses on the ECL-related impacts, with key findings on:
ECL charge impact of H1 2023 on the profit or loss and ECL allowances.
Changes in coverage ratios and allocation between stages.
In mid-September, the European Commission (EC) launched a consultation on a draft delegated act that proposes to increase by 25% the size criteria set out in the Accounting Directive to classify undertakings and groups into different categories (micro, small, medium and large), in order to reflect inflation over the past ten years.
On 31 July, only three weeks after the end of the public consultation on the draft delegated act, but a month behind the schedule set by the Corporate Sustainability Reporting Directive (CSRD), the European Commission adopted the final regulation on the first set of European Sustainability Reporting Standards (ESRS), after making a few last-minute changes based on the responses (more than 600)...