Up to 6 macroeconomic scenarios and their probabilities
Spanning the probability distribution of forecasts and covering the expected lifetime of assets.
UNBIASED SCENARIOS DESIGNED SPECIFICALLY FOR IFRS9
Oxford Economics offers a solution that specifically addresses the requirements of new accountancy standards, namely to provide an unbiased view of the forward-looking distribution and associated probabilities for the macroeconomic outlook.
Exploiting our forecast track record, the in-depth analysis of our 160 in-house country economists, and the world’s leading globally integrated macro model, Oxford Economics produces robust forward-looking distributions for the key drivers of impairment in 80 countries in line with local and global risks.
Click to download sample IFRS9 scenarios for:
What the service includes:
Comprehensive Variable Coverage
Scenario outputs for Germany, Spain, Netherlands, the UK, and France covering the key drivers of impairment: property prices, financial asset prices, income gearing, interest and FX rates.
Detailed reports
Reports that explicitly detail changes from the last set of scenarios based on our analysis of current trends and risks, informed by proprietary global surveys of around 200 leading companies and external benchmarks.
Regular updates to scenarios
Scenarios are updated quarterly to reflect changes to the base case and emerging risk.
Methodology
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.
MODELLING APPROACH
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 of multiple economic scenarios on portfolios.
VALIDATED MODEL
The Global Economic Model has been used by banks for stress tests published by a large number of the authorities around the world, including the Federal Reserve, the European Banking Authority, the UK Prudential Regulation Authority, the Australian Prudential Regulation Authority, the Hong Kong Monetary Authority and the Monetary Authority of Singapore.
WHY YOU CAN RELY ON US
Over the past 18 months we have helped institutions of varying sizes across the world construct and use multiple economic scenarios and their probabilities to calculate expected losses. An acknowledged world leader in global forecasting and quantitative analysis, our roster of more than 1,500 clients includes leading companies across a range, of industries including financial services, consumer goods and retailers, industrial manufacturing and energy and professional services
IFRS9 Macroeconomic Scenarios
With over 35 years of independent forecasting and risk analysis experience, Oxford Economics is uniquely placed to provide an unbiased and transparent view of the forward-looking distribution for the economy. Our tailored IFRS 9 service includes up to six economic scenarios and their associated probabilities covering 80 countries.