Regulatory Alerts2020-05-29
G6/2020: International Financial Reporting Standard (IFRS) 9 in response to the COVID-19 Pandemic
The Prudential Authority of South Africa issues further guidance clarifying the application of IFRS 9 expected credit loss provisioning during the COVID-19 pandemic. The regulator mandates that short-term payment holidays and government assistance should not automatically trigger credit risk staging or default assessments, requiring banks to evaluate portfolio-level data and forward-looking macroeconomic factors. Institutions must document staging decisions, apply appropriate post-model overlays to mitigate procyclicality, and maintain robust governance to ensure consistent capital calculations across retail and corporate exposures.
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