From the Introduction: "The 2007-09 GFC [Great Financial Crisis] exposed significant shortcomings in the accounting principles that underpinned banks' loan loss provisioning practices. At the time, the accounting standard for loan loss provisioning was based on a so-called incurred loss (IL) model, limiting the ability of banks to recognise loan loss provisions in advance of a loss event. It was also criticised as being procyclical, because a large amount of provisions were recognised only after losses became evident. [...] This paper takes stock of the measures introduced in several jurisdictions to influence how ECL [expected credit losses] methodologies can be applied under the current Covid-19 [coronavirus disease 2019] pandemic. Section 2 compares the key features of incurred and ECL methodologies, while Section 3 summarises the actions taken in the United States and in selected IFRS [International Financial Reporting Standards] jurisdictions that have adopted ECL provisioning frameworks. This section also reviews the cumulative impact of these measures on a bank's financial metrics."
FSI Briefs No. 3; Financial Stability Institute Briefs No. 3
2020 Bank for International Settlements
Bank for International Settlements: https://www.bis.org/