Page 33 - Annual Report 2016 EN

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Liquidity risk framework IFRS 9 (Financial Instruments)
implementation – thematic review
In compliance with the Basel Committee on Banking Supervision’s
reforms on liquidity risk, the Supervision division ran a Quantita- The International Accounting Standards Board (IASB) issued Interna-
tive Impact Study (QIS) on the key liquidity risk metrics, Liquidity tional Financial Reporting Standard (IFRS) 9 - Financial Instruments
Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). The in July 2014, with a mandatory effective date for annual periods
QIS covered the reporting quarters ending June, September and beginning on or after 1 January 2018. The Regulatory Authority
December 2016 and was aimed at evaluating the options avail- conducted a thematic review on IFRS 9 implementation aimed
able to the Regulatory Authority in the implementation of the LCR at assessing respective firms’ preparation and readiness for the
and NSFR requirements. Twelve firms participated in the study. timely and effective implementation of the IFRS 9 standard and the
The results of the QIS will inform the Regulatory Authority’s position impact of the new standard on provisioning and capital adequacy.
on the proposed Liquidity Risk Rules expected to be implemented Based on the feedback received, most firms are targeting imple-
in 2017. mentation of their IFRS 9 initiatives in 2017 and are expected to be
largely compliant by the end of that year.