The Federal Reserve finalized, in June 2018, the rule to prevent concentrations of risk between large banking organizations and their counterparties from undermining financial stability, known as Single Counterparty Credit Limit (SCCL).
Olivier Brucker, Anders Rodenberg, Moun Seo
Reserving for loan loss is one of the most important accounting aspects for banks. Its objective is to cover estimated losses on impaired financial instruments due to defaults and non-payment. Reserve measurement affects both the balance sheet and income statement. It impacts earnings, capital, dividends and bonuses, and attracts the attention of bank stakeholders ranging from the board of directors and regulators to equity investors. In response to the so-called “too-little, too-late” problem experienced with loan loss reserve during the Great Financial Crisis, accounting standard setters now require that banks provision against loan loss based on expected credit losses (ECL). Arguably, calculating the Expected Credit Loss Model under IFRS 9 and CECL presents a momentous accounting change for banks, with the new standards coming into effect sometime between 2018 and 2021, depending on the jurisdiction.
This whitepaper covers the challenges and best practices for leaner and more efficient regulatory reporting.
In this webinar, view the observations that were put forward in a recent conversation with Andrew Bockelman, general manager of banking RegTech at Moody's Analytics.
Join Moody's Analytics for an informative webinar discussing FASB's new Current Expected Credit Loss (CECL) standard and what you can be doing now to prepare.
This whitepaper covers the challenges and best practices for closer alignment of liquidity risk management and regulatory reporting.
This article discusses areas such as capital stress testing where simplification of regulations could improve the flow of credit while protecting the financial system.
In this article, we explore existing and future accounting and operational challenges faced by institutions acquiring financial assets with credit deterioration.
In this article, we use historical data to calculate and compare loan- and portfolio-level loss allowances under the incurred loss model and CECL.
Coverage this month includes , the Financial Stability Board (FSB) agreed its 2017 work plan. The European Banking Authority (EBA) report with qualitative and quantitative observations of its first impact assessment of the International Financial Reporting Standard (IFRS) 9, accounting for financial instruments, standard. The European Commission (EC) presented a comprehensive package of reforms aimed at further strengthening the resilience of European Union (EU) banks. The United States (US) Government Accounting Office (GAO) issued a report detailing additional actions which could help the Federal Reserve achieve its stress testing goals. The Hong Kong Monetary Authority (HKMA) issued a consultation on the local implementation of the Net Stable Funding Ratio (NSFR).
Michael van Steen
Basel III, Basel Beyond III, Basel Liquidity Compliance, Loss Accounting: ALLL, Loss Accounting: CECL, Loss Accounting: IFRS 9, Regulatory Capital, Regulatory Reporting: EU, Regulatory Reporting: US, Stress Testing: EU, Stress Testing: UK, Stress Testing: US
The FASB voted to move forward with the new impairment model, known as the Current Expected Credit Loss (“CECL”) model, which will change how you calculate allowance for credit losses. Ensure your institution identifies challenges and processes early.
This Whitepaper explores the BCBS' final framework on the revised Pillar 3 disclosure requirements for credit risk, counterparty credit risk (CCR), securitization, and market risk.