Banks baffle investors as art meets science in accounting rule


LONDON (Reuters) – Like the myriad approaches governments are taking to tackle the coronavirus crisis, the way the world’s top banks are calculating their potential losses also differs widely, with puzzling outcomes for investors.

FILE PHOTO: A Barclays bank building is seen at Canary Wharf in London, Britain May 17, 2017. REUTERS/Stefan Wermuth

These discrepancies are rooted in the interpretation of new accounting rules called IFRS9, which have been designed to promote transparency and stability by making banks account for loan losses earlier.

But rather than solving problems seen during the 2008-9 financial crisis, when markets were blindsided by a

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