Professor Eamonn Walsh:

Yes. There is a post-change to these rules, largely as a result of the financial crisis. I believe that from 2017 or 2018 the banks will be required to record impairments using expected credit losses. This will involve making an estimate of expected losses so that greater impairment can be recognised earlier in the cycle. When one makes loans, one does not expect to make huge losses.

It is only as the cycle progresses that it becomes apparent that one has some borrowers who cannot or will not repay their loans.