CECL Economic Scenario Capabilities
Moody’s Analytics economic scenarios enable firms to use “reasonable and supportable” forecasts to meet FASB’s CECL impairment standards. We produce baseline forecasts and multiple stressed scenarios based on sound economic theory and decades of observed historical econometric relationships. Our econometrically derived scenarios enable clients to assess lifetime credit losses under a range of differing assumptions.
Use Scenarios Produced and Maintained By Expert Economists
Our team of economists produce a monthly baseline forecast and up to eight alternatives for more than 50 countries, including the US, where we break out state and metropolitan areas as well. Our forecasts cover 1,800+ economic, financial, and demographic variables, enabling firms to go beyond the headline numbers. We provide you with fully documented model methodology and scenario assumptions, and access to our economists to support your validation needs. We also offer back-testing, tracking, and model validation reports.
Address Accounting Standards While Managaging Portfolio Credit Risk
Our services enable you to employ defensible scenarios for CECL compliance. We also provide insight into specific risk factors, such as retail sales, debt-service burden, bankruptcy rates, initial claims, sector-specific industrial production, interest rate and bond yield curves, housing and labor market performance metrics, demographic series and many more. Scenarios can be used within our process automation tools or available separately with multiple delivery options to suit your needs.
Benefit from an Integrated Solution
The Moody’s Analytics CECL economic scenario capabilities are part of our Credit Loss and Impairment Analysis Suite, which includes credit risk models and data, economic forecasts, advisory services, and infrastructure solutions that assist with the implemention of expected credit loss and analysis. This modular, flexible, and comprehensive solution can address the many challenges of implementing impairment calculations.
