The PRA’s thoughts on IFRS 9 - our comment

The PRA’s thoughts on IFRS 9 - our comment

On the 15th April the PRA wrote to the CFO’s of the top seven banks to give their initial opinions on the implementation of the new impairment requirements under IFRS 9. As expected for such a substantial subject, the findings, based on their written auditor reporting work, are varied in nature. Through discussion with a range of lenders and client engagements, we see many of the issues raised by the PRA. However, there are also some omissions that we expected to see.



A recent Bank of England working paper highlights the link between banking market competition and financial system stability. Consistent with earlier work, it highlights that as competition increases, the banking system overall responds typically by moving to higher risk lending.  However, in addition, it describes how individual banks tend to converge with the most-risky becoming more secure as competition increases.


 Providing insight beyond the macroeconomic headlines. 4most, the leading risk analytics consultancy, has successfully launched a bespoke economics subscription service. The international service brings rigorous economic analysis to the challenges faced by the financial services sector.   

RegRadar: 4most bring you the latest news from the credit risk industry

Welcome to the first edition of RegRadar. With publication of Basel III reforms in December 2017, the ongoing EBA RWA harmonisation programme and both the BoE & the ECB consulting on the Definition of Default for credit risk, forward planning and timely implementation is key to understanding how reforms will impact capital and compliance costs of current and future business plans.

Has the expansion of car finance overstretched borrowers?

Over the past decade, there has been a significant shift in patterns of consumer behaviour in relation to purchasing of new cars. UK private car registrations were 39% higher in 2016 than they were in 2011, a trend which has in part been driven by the expansion of the Personal Contract Purchase (PCP) deals. Some 82% of private new car purchases was financed in this way in 2016. PCPs contribution to the rise in unsecured borrowing is firmly on the radar of both the Bank of England (BoE) and Financial Conduct Authority (FCA).

Households due to take on more debt in the long term as finances squeezed, Budget indicates

The final March budget didn’t spring any surprises.  While the Chancellor presented a more optimistic picture for short-term growth,  predications from the Office for Budget Responsibility’s (OBR) forecasts indicate that the improvement will likely not last long. 

4most appoints Keith Church as Head of Economic Modelling

07 March 2017, London: 4most, the global credit risk consultancy, has announced the appointment of Keith Church as Head of Economic Modelling. Keith joins 4most from Oxford Economics, where he was Director of Macro Modelling, holding responsibility for the development and coherence of Oxford Economics Global Economic Model.