In this paper, we provide empirical support for the conclusion that the CECL standard will be less procyclical than the incurred loss standard.
Automation has become the latest industry buzzword, but what does this mean? How can automation streamline your commercial loan origination process, increase the productivity of your lending officers and make your customers happier?
Today's loan origination landscape is forcing lenders to rethink their workflow engines to adapt to the new environment. Without a strategic approach to designing the workflow engine, lenders will find themselves battling rising costs and inefficiencies in an increasingly fragmented and competitive marketplace.
Todd Classen, Anju Govil
In this article, we explore what monitoring lenders routinely undertake, why it is so difficult and
what new technology tools are at their disposal to improve the process, and show how better
monitoring can lead to better risk management and lower portfolio losses.
Identifying At-Risk Firms in Your Private Firm Portfolio
Banks need to adopt new technology for quicker decisioning without sacrificing any of the risk assessment and analysis. At Moody's Analytics, we're helping our clients meet this challenge by investing in the latest data trends and technology advancements and implementing them into our solutions.
Increasing demand for credit has opened up the marketplace to a host of new tech-savvy lending providers. To compete in this new landscape, banks are changing their approach to credit management in order to provide faster and more convenient service to their clients.
In this webinar, we examine how CECL's forward-looking requirements can significantly change your loss reserves and future financial statements.
Effective risk assessment approaches to project finance must reflect a true understanding of complex issues. These assessments include the macroeconomic context, which provides an early indication of the potential risks and returns of infrastructure investments.
This whitepaper covers the challenges and best practices for closer alignment of liquidity risk management and regulatory reporting.
This article explores innovative strategies that traditional banks can use in small business lending to remain competitive with alternative lenders.
We propose a composite capital allocation measure integrating regulatory and economic capital. The approach builds upon the economic framework underpinning traditional RORAC-style business decision rules, allowing for an optimized risk-return tradeoff while adhering to regulatory capital constraints. The measure has a number of depictions, and it can be viewed as a weighted sum of economic and regulatory capital, as economic capital adjusted for a regulatory capital charge, or as regulatory capital adjusted for concentration risk and diversification benefits. Intuitively, when represented as economic capital adjusted for a regulatory capital charge, the adjustment can be represented as the additional top-of-the-house regulatory capital, above economic capital, allocated by each instrument's required regulatory capital. We show that the measure has ideal properties for an integrated capital measure. When regulatory capital is binding, composite capital aggregates to the institution's top-of-the-house target capitalization rate. We find the measure is higher than economic capital, but lower than regulatory capital for instruments with high credit quality, reflecting the high regulatory capital charge for this instrument class. Finally, we address how IFRS 9/CECL impacts the CCM and discuss the broader implications of the new accounting standards.