Professor Eamonn Walsh:

One could end up spending a lot of time thinking about the right way to account for impaired loans but largely the result will not be that different in the growth phase of a credit boom. Generally, one will have quite low loan reserves. For example, the Nyberg report makes mention of the Spanish authorities which required a particular form of provisioning. They said that they were not interested in the international financial reporting standards but wanted their banks to provide for loans in a particular way.