IFRS 9 Scenario Service

The methodology used to construct these forward-looking distributions is similar to that used by the European Central Bank and Bank of England when assessing the risks around their central projections. Based on these robust distributions, we derive coherent economic scenarios along with their probability. Crucially, our approach ensures that the only changes to scenarios from quarter to quarter are due to a transparent assessment of emerging or receding risks utilising external benchmarks and proprietary surveys on the nature and severity of risks to the economy.

At the centre of our approach is our renowned Global Economic Model, which integrates individual country models through global assumptions about trade volume and prices, competitiveness, interest and exchange rates, capital flows and commodity prices. The model’s unique open-architecture framework enables us to assess the impacts of adverse scenarios on economic indicators and a range of asset classes. The model’s flexible software allows variables to be added to meet our clients’ needs when assessing the impact on portfolios of multiple economic scenarios.

Our existing list of IFRS 9 clients spans major financial institutions in the UK, Eurozone, Asia, Middle East and Africa. In the US we also support financial institutions with our CECL service.