Accounting for losses during a pandemic

US banks get green light from senators to use loan loss accounting methods widely criticised following 2008 crisis

broken-hedge-accounting

How banks account for losses on their lending is arguably more important during the onset of a crisis than at any other time. The coronavirus pandemic has caused widespread disruption to – and in some cases complete cessation of – the incomes of households and businesses. As a result, banks’ books may soon face a significant increase in losses as the affected borrowers are unable to continue to make loan repayments.

Wary of this, US senators are giving banks the option to delay the

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