As I have been saying about IFRS:
The FPC said it was most concerned that banks had not set aside adequate provisions for this potential new crop of troubled loans.
“If provisioning is inadequate, banks’ reported profits and levels of capital may provide a misleading picture of their financial health,” said Sir Mervyn King, Bank governor and chairman of the FPC.
via Bank warns lenders over bad loans – FT.com. In the lastest Financial Stability Report, the Bank of England indicates various other flaws arising out of bank accounting standards. More analysis later but see also Bank profits distorted by IFRS accounting rules, says Bank of England Governor.