Global financial markets are focused on signs that the US Federal Reserve will lift its policy rate at its December 13-14 meeting. Oil prices also preoccupied investors, as crude oil prices continued to recover this past week.
Irina Baron, Xian Li
In this article, we analyze the potential effects of upcoming CECL regulations on lenders and explore the impact of CECL under different Moody's Analytics scenarios.
Donald Trump's stunning win over his Democratic Party opponent, Hillary Clinton, was the dominant factor driving global market-based measures of credit risk since the election.
Irina Baron, Xian Li
Germany's biggest bank, Deutsche Bank AG, faced intense scrutiny from investors in recent months. The company's EDF™ (Expected Default Frequency) has shown signs of deterioration as the company's financial risk has been elevated, as measured by its market leverage.
International Financial Reporting Standard 9 (IFRS 9) is a high-impact symbolic, operational, IT and organisational transformation event for finance and risk. The Risk Chartis IFRS 9 Market Report focuses on the key challenges for banks implementing IFRS 9, including exclusive content from Moody's Analytics.
According to new forecasts from Moody's Analytics, based on the Brookfield RPS House Price Indices, Canadian house prices will experience slower growth over the next five years, but avoid significant declines at the national level forecasts project that a number of metropolitan areas, most notably Vancouver and Edmonton, will experience some modest price declines in the near-term.
In this article we demonstrate how to combine our forecasts of bank financial statements with internal data to produce forecasts that better reflect the macroeconomic environment posited under the various Comprehensive Capital Analysis and Review scenarios.
The Fed's Comprehensive Capital Planning and Review (CCAR) continues to be a barometer for capital adequacy of large banks in the US. With the results of the 2016 DFAST now in the books, we look at factors that will impact the Fed's CCAR decisions next week and the challenges that firms will face in the future.
Angang Steel is one of China's largest steel producers, but in recent times slower economic growth, coupled with elevated steel production, have put downward pressure on prices and revenues.
Despite high demand for small business credit, small business lending at banks remains depressed and many prospective borrowers struggle to find financing. Small businesses cite onerous processes, lack of transparency, and high search costs among the challenges of obtaining credit through traditional banking channels.
To help better understand this specific effort and its larger consequences, this article summarizes AnaCredit's rationale, presents its historic and future timelines, and highlights its features and challenges. The article concludes by offering some guidance on how institutions can best meet the challenges of and benefit...
Michael van Steen
On June 16, FASB issued the much anticipated financial instruments impairment standards update. The implications of this standard are significant and will change the way credit losses are measured for most financial assets (e.g. receivables, debt securities and loans).
This article outlines recent approaches to managing credit risk when facing regulatory capital requirements. We explore how institutions should best allocate capital and make economically-optimized investment decisions under regulatory capital constraints, such as those imposed by Basel or CCAR-style rules.
In this article, we review the common themes reflected in recent regulatory guidelines released by the Federal Reserve and the BCBS.
This article is a summary of the views expressed by regional banking institutions in a recent survey about IFRS 9 regulation. The survey was conducted to assess progress, potential challenges, and plans of banks with regards to IFRS 9 compliance.
María C. Cañamero, Michael McDonald, Yagmur Uenal
This article describes the new standards set forth by the FASB. It covers the history of the ALLL and explains how the recent financial crisis highlighted the need for new standards.
This article provides an overview of the new standard and analyzes the major challenges financial institutions will face in ensuring IFRS 9 compliance.
In this article, we discuss development of a framework that addresses the forward-looking and probability-weighted aspects of IFRS 9 impairment calculation using macroeconomic forecasts. In it, we address questions around the practical use of alternative scenarios and their probabilities.
This article discusses how to address the specific challenges that IFRS 9 poses for retail portfolios, including incorporating forward-looking information into impairment models, recognizing significant increases in credit risks, and determining the length of an instrument's lifetime.
IFRS 9 aims to streamline and strengthen risk measurement and reporting of financial instruments in an efficient, forward-looking manner. This new accounting standard will have far-reaching impacts on accounting practices and performance results.
In this article, I take a theoretical look at negative interest rates as a means to stimulate the economy. I identify key factors that may influence the volume of deposits held in the economy. I then empirically describe the unique situation of negative interest rates.
This article introduces Credit Risk Cascades, a new model that forecasts probability of default of financial institutions under compound scenarios. The model seamlessly integrates macroeconomic, counterparty, and systemic risk projections.
In this interview with Mark Almeida, President of Moody's Analytics, we discuss key themes for this year's Risk Practitioner Conference.
With auto leasing close to record highs, the need for accurate and transparent used-car price forecasts is paramount. Concerns about the effect of off-lease volume on prices have recently peaked, and those exposed to risks associated with vehicle valuations are seeking new forms of intelligence. With these forces in mind, Moody's Analytics AutoCycle™ has been developed to address these evolving market dynamics.
The article presents Moody's Analytics recommended best practices in credit and counterparty risk management for CFOs, treasurers and credit managers of non-financial corporations.
In this article, our experts focus on two recent developments: how to manage lease-term or model-year concentration risk and how to find affordable finance options for subprime or near-prime sector.
This article explains how Moody's Analytics can help insurers with their solvency monitoring, reporting and stress-testing requirements in Solvency II.
December 2015 was a busy month for regulatory agencies and global standard setters. Throughout the year the industry has been waiting for additional guidance on high impact topics including capital planning and allowance methodologies, and in the final stretch of 2015 both the Federal Reserve and the Basel Committee on Banking Supervision (BCBS) complied. This paper will primarily focus on common themes in the two releases.