97. The rationale for this approach is that the creditworthiness of the counterparty, and thus the …

The rationale for this approach is that the creditworthiness of the counterparty, and thus the ECL anticipated upon initial recognition, is taken into account in the pricing of credit at that time. It follows, then, that a post-origination increase in credit risk may not be fully compensated by the interest rate charged, and, as a consequence, credit institutions should carefully consider whether there has been a significant increase in credit risk³⁰ . If so, the lending exposure should be subject to lifetime ECL measurement.

³⁰ IFRS 9 requires entities to consider a wide range of factors in assessing for significant increases in credit risk, and pricing may be one of those factors.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/