[Verse 1] Gone are the days of waiting for default Incurred loss model is old news IFRS nine brought a brand new approach Expected credit loss is what we use Look ahead not behind at what might come Forward-looking is the key Twelve months or lifetime, that's the sum Of losses we expect to see [Chorus] Stage one, stage two, stage three we go Twelve months, lifetime, watch the credit flow Expected loss before it hits the door Forward-looking is the core Stage one, stage two, stage three we know Impairment growing as the stages grow ECL model, that's the way we score Credit losses evermore [Verse 2] Stage one starts with recognition day Credit risk is normal still Twelve-month losses on display Expected defaults, what's the bill? But when significant increase appears Credit risk has jumped up high Stage two brings lifetime fears All expected losses multiply [Chorus] Stage one, stage two, stage three we go Twelve months, lifetime, watch the credit flow Expected loss before it hits the door Forward-looking is the core Stage one, stage two, stage three we know Impairment growing as the stages grow ECL model, that's the way we score Credit losses evermore [Bridge] Stage three means credit impaired Objective evidence is there Lifetime losses fully shared Interest on the net to bear Probability times exposure times loss given default Multiply these three amounts That's the formula without fault Every credit loss it counts [Verse 3] Practical expedients help us through Provision matrix is the way Days past due give us the clue Group assets by their risk array External ratings, internal grades Economic factors weigh them in Reasonable supportable aids The model where our loss begins [Chorus] Stage one, stage two, stage three we go Twelve months, lifetime, watch the credit flow Expected loss before it hits the door Forward-looking is the core Stage one, stage two, stage three we know Impairment growing as the stages grow ECL model, that's the way we score Credit losses evermore [Outro] Forward-looking all the way Expected credit loss today IFRS nine is here to stay ECL shows us the way
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