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In this video, Cris DeRitis reviews the advantages and disadvantages of the different type of models that are acceptable for CECL. A portfolio-level approach is a simpler modeling method, but lacks granularity.

In this video, Cris DeRitis reviews the advantages and disadvantages of the different type of models that are acceptable for CECL. A portfolio-level approach is a simpler modeling method, but lacks granularity. Loan-level models are more granular, but more complex and costly. Vintage cohort-level models are sensitive enough to capture economic changes, but not as complex and costly as loan-level models.

Related Insights

Mean Reversion in CECL: The What and the How

With the CECL guidelines on mean reversion open to multiple interpretations, our paper discusses some approaches institutions can take for reversion beyond the reasonable and supportable horizon.

Article

CECLnomics and the Promise of Countercyclical Loss Accounting

In this study, we address these shortcomings by utilizing data that track loan volume and performance to ascertain CECL's cyclical impact.

October 2018 Pdf Dr. Cristian deRitis
Article

Beyond Theory: A Practical Guide to Using Economic Forecasts for CECL Estimates

In this paper, we discuss some of the options that institutions have for incorporating economic forecasts into their expected loan loss reserve calculations. We discuss the benefits and costs of each approach and provide practical recommendations based on institution size and complexity.

CECL for Consumer Credit Portfolios: Modeling Best Practices

In this webinar, our economists and consumer credit analyst will share insight on techniques and best practices for modeling allowances for CECL.

August 02, 2018 WebPage Dr. Cristian deRitisDr. Deniz Tudor
Presentation

Be Reasonable: Creating Supportable Forecast Scenarios for CECL

This presentation discusses the CECL requirement of reasonable and supportable forecasts. We discuss what makes an economic scenario reasonable and supportable and discusses structural forecast model methodology. We also compare customized, standard and off-the-shelf scenarios and examine forecasting credit losses.

June 2018 Pdf Dr. Cristian deRitis

CECL Impact Analysis for Consumer Lending Portfolios

Through case studies of mortgage and auto portfolios, our experts explore the potential impact of CECL on industry wide reserves and factors that will affect results at the institution level.

May 16, 2018 WebPage Dr. Cristian deRitisDr. Deniz Tudor
Webinar-on-Demand

President Trump's Tariffs – Assessing the Impact of Various Trade Scenarios

In this webinar, Mark Zandi and our team of economists use the Moody’s Analytics Global Macroeconomic Model to assess the impact of various trade scenarios.

April 2018 WebPage Mark Zandi, Dr. Cristian deRitis, Marisa DiNatale
Webinar-on-Demand

The Transition to CECL: IFRS 9 Lessons Learned, Part 2

In this video webcast, we identify the critical components needed for a successful CECL implementation and the new considerations it also brings.

February 2018 WebPage Dr. Cristian deRitis, Michael Gullette, Masha Muzyka
Webinar-on-Demand

The Transition to CECL: Disclosures, Part 4

In this video webcast, we identify the critical components needed for a successful CECL implementation and the new considerations it also brings.

February 2018 WebPage Dr. Cristian deRitis, Michael Gullette, Masha Muzyka
Webinar-on-Demand

The Transition to CECL: Implementation Considerations, Part 3

In this video webcast, we identify the critical components needed for a successful CECL implementation and the new considerations it also brings.

February 2018 WebPage Dr. Cristian deRitis, Michael Gullette, Masha Muzyka
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