Authors: Ioannis Manoukas, Petros Lois, Spyros Repousis

Title: The Impact of the "IFRS 9" in the Financial Instruments of the Largest European Banks

Abstract

Purpose - The main objective of this study is to analyze the International Financial Reporting Standard 9 (IFRS 9), in the financial instruments and risk management of largest European Banks.

Design/methodology - For the purposes of this study, 15 of the 50 largest banking institutions in Europe are taken as a sample based on the total value of their assets. Data collected from the annual financial reports and the effect of IFRS 9 is examined.

Findings – Empirical analysis shows that the new way of classifying financial instruments has led to a reduction in the total value of financial instruments at an average of 3.53%. At the same time, it is important to reduce derivatives that are held for hedging purposes both in assets and liabilities. The analysis of financial ratio indicators investigates issues related to economic efficiency and leverage. However, the results do not show a clear trend.

Practical implications – This study is useful for policy makers, regulatory and accounting authorities, investors and central banks.

Originality/value – It provides useful insight into the perception of IFRS9 and the impact on financial reports for financial services professionals.

Keywords: IFRS 9, IAS39, Financial Instruments, Classification of Financial Instruments.