IFRS 9 scenario service
Built on decades of forecasting expertise and trusted by financial institutions worldwide.
LATEST INSIGHTS
Overview
Independent macroeconomic scenarios for robust IFRS 9 provisioning
Financial institutions need more than economic forecasts to meet IFRS 9 requirements. They need transparent, probability-weighted scenarios that stand up to regulatory scrutiny, support consistent impairment modelling and adapt as economic conditions evolve.
Oxford Economics provides an independent IFRS 9 scenario service built on one of the world’s leading global macroeconomic modelling frameworks. Combining decades of forecasting expertise, a transparent methodology, and ongoing economist support, our quarterly scenarios underpin financial institutions’ expected credit loss (ECL) calculations and help to improve consistency across the provisioning process.
How we help
We provide a suite of up to six macroeconomic scenarios, covering our baseline and two upside and three downside outcomes, specifically designed to support IFRS 9 provisioning.
Each scenario includes associated probabilities and each quarterly update includes comprehensive supporting documentation, helping financial institutions meet governance, audit and regulatory requirements with confidence.
Our scenarios are generated using the Oxford Economics Global Economic Model, providing coherent and internally consistent macroeconomic assumptions across more than 85 economies.
Outputs cover the key variables used in impairment modelling, including GDP, unemployment, inflation, interest rates, exchange rates, residential and commercial property prices and financial asset prices.
Economic conditions evolve rapidly. Our scenarios are updated quarterly to reflect changes to the global outlook and emerging risks, ensuring provisioning assumptions remain relevant throughout the reporting cycle.
We also currently support a range of clients with bespoke solutions to align with their internal processes. This can include bespoke modelling of specific series, off-cycle updates or even fully bespoke baselines forecasts or scenario assumptions.
Our service goes beyond providing economic scenarios. Every quarterly update includes supporting analysis explaining changes in economic conditions, the judgements informing our outlook, and the assumptions behind the scenarios. This is supported by a broad range of research consistent with the IFRS 9 baseline forecast, covering both national and regional economies.
Throughout the reporting cycle, our production team and economists are available to answer technical questions, explain changes and support responses to auditor requests. A dedicated account manager provides ongoing support, helping clients apply the scenarios with confidence.
Why Oxford Economics
Decades of forecasting expertise
Our IFRS 9 methodology is built on decades of forecasting experience. By analysing historical forecasting performance and comparing forecasts against actual economic outcomes, we produce robust probability distributions that reflect real-world uncertainty. This depth of forecasting history, covering multiple historic crisis episodes, strengthens the credibility and resilience of our scenarios.
Transparent methodology
Transparency is fundamental to effective governance. By using Oxford Economics’ Global Economic Model as the basis for our scenarios, we use the same tool used by central banks, finance ministries, international organisations, financial institutions, and corporates across the globe. Its fully documented model structure and assumptions support internal validation, audit processes, and regulatory review.
We also clearly documented how our scenarios are developed, how probabilities are assigned and how changes in the balance of risk influence each quarterly update. This provides greater confidence for risk, finance and audit teams reviewing provisioning assumptions.
Independent, globally consistent scenarios
Our independent scenarios provide a consistent framework across more than 85 economies, enabling international financial institutions to apply a single methodology across global portfolios while reflecting regional economic conditions.
A trusted long-term partner
Oxford Economics has supported financial institutions with IFRS 9 scenarios since the inception of the accounting standard. Clients value not only our forecasting expertise, but also our transparent communication and long-term partnership throughout the reporting cycle. Clients are also supported by the analysis from our 400+ in-house economists, who can provide detailed feedback on queries around the assumptions underpinning the forecast, and interim updates of the baseline forecast in response to global developments.
Contact us
If you would like to learn more about our IFRS 9 scenario service, please fill in the form. A member of the team will be in touch with you as soon as possible.
By submitting this form you agree to be contacted by Oxford Economics about its products and services. We will never share your details with third parties, and you can unsubscribe at any time.
