Top Swedish Bank CEO Says Crisis Accounting Rule Adding to Risks

The chief executive of one of Sweden’s biggest and best capitalized banks says an accounting rule introduced after the financial crisis of 2008 is now adding to risks as his industry struggles to cope with the coronavirus fallout.

International Financial Reporting Standard -- more specifically IFRS 9 -- forces banks to identify potential losses more quickly. In practice, that means booking loan losses sooner.

Johan Torgeby, the CEO of Stockholm-based SEB AB, says the risk is that investors and analysts penalize banks that follow the rules, especially at a time when governments are encouraging the financial industry to provide ...