For immediate release

As part of its ongoing work to improve the transparency of banking organizations, the Basle Committee on Banking Supervision (Basle Committee) has issued a policy paper entitled Sound Practices for Loan Accounting, Credit Risk Disclosure and Related Matters. Once finalized, the Basle Committee policy paper will represent the first comprehensive international supervisory guidance on sound practices for loan loss allowances, accounting for troubled loans, and related credit risk disclosures of banking organizations. The policy paper presents guidance on sound practices through the discussion of 25 principles. The paper provides guidance on sound practices with respect to key loan accounting issues, such as the initial recognition and measurement of loans, subsequent measurement of impaired loans, the establishment of loan loss allowances, income recognition and issues relating to troubled debt restructurings. Moreover, the paper presents sound disclosure practices for loan portfolios, troubled loans, loan loss allowances and related credit risk management practices. The paper concludes with a brief discussion of the role of supervisors in assessing a bank's management of asset quality and the adequacy of loan loss allowances. The paper has been issued by the Basle Committee as a proposal for public comment, with comments requested by March 15, 1999. The Basle Committee's press release and paper can be obtained from the Internet (http://www.bis.org) or from the Basle Committee Secretariat at the Bank for International Settlements.

1998 Banking and consumer regulatory policy | 1998 Other announcements