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S&P: New accounting rules could deflate bank capital and alter management strategy

Johnathan Nus and Osman Sattar, analysts at Standard & Poor’s Rating Services, write in FX-MM that new accounting rules around the world are likely to drive ballooning credit loss reserves for banks. The impact of these changes will not be equal for all, with significant regional differences. And while it is hard to predict bank management reactions, the authors suggest that banks will shift strategies as a result and begin to increase pricing on loan products.

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