Moody’s Analytics credit risk data, models, economic forecasts, advisory services, and infrastructure solutions support implementation of the Current Expected Credit Loss (CECL) model, the new Financial Accounting Standards Board (FASB) standard for estimating credit losses on financial instruments.
CECL, which governs recognition and measurement of credit losses for loans and debt securities, presents several challenges for institutions trying to determine how to measure expected credit losses.
Financial institutions transitioning to CECL need robust systems to aggregate data, calculate expected credit losses, derive provisions, and report on key risk drivers. For many institutions, the process to calculate and approve the allowance will also change. Furthermore, CECL might require the use of additional data, more refined credit risk models, and greater internal modeling resources.
The Moody's Analytics Credit Loss and Impairment Analysis Suite provides solutions for the most crucial aspects of the impairment calculation process and can support various approaches taken by small and large institutions for estimating losses.
Expertly developed economic scenarios and comprehensive, granular data
CECL requires institutions to account for forecasts of future economic conditions, using internal or third-party economic scenarios. Our team of economists provides standard and bespoke macroeconomic data, forecasts, and scenarios to help you at every step of this process.
Moody’s Analytics also provides comprehensive and granular credit risk and financial data to help capture and collect historical data for each exposure in the portfolio. When combined, these datasets create a powerful foundation on which to develop loss estimation models, quantitative credit risk models, and benchmarking.
Best-in-class modeling, analytical expertise and powerful impairment calculation software
Our solutions offer standard and customizable credit risk rating models for major asset classes. Modify existing models to extend forecasting horizons or implement internally developed or off-the-shelf models for forward-looking estimates of credit risk throughout the life of the exposure.
Impairment calculation software helps reduce manual processes and ensure that calculations are carried out in a controlled environment with auditability, reporting, and archiving capabilities. Enhancing governance and controls over the impairment calculation process helps facilitate the flow of information to managers and auditors of uncertainties around estimates and their impact on financial statements. The calculation environment supports workflow and overlay management for model governance and integrates the scenarios, data, models and provision calculations to ensure interactivity and auditability.
Sohini Chowdhury is a Director and Senior Economist with Moody’s Analytics, specializing in macroeconomic modeling and forecasting, scenario design, and market risk research, with a special focus on stress testing and CECL applications. Previously, she led the global team responsible for the Moody’s Analytics market risk forecasts and modeling services while managing custom scenarios projects for major financial institutions worldwide.
Leading economist; recognized authority and commentator on personal finance and credit, U.S. housing, economic trends and policy implications; innovator in econometric and credit modeling techniques.
David Fieldhouse is a Director of Consumer Credit Analytics at Moody’s Analytics, where he oversees the development of retail loan performance models for financial lending institutions.
Streamline your reserve calculation process and feel confident that you are exercising a consistent and comprehensive allowance for loan and lease losses.
CECL Data Solutions - Historical Backfill provide a full loan-level dataset across multiple asset classes.
Moody’s Analytics produces defensible scenarios to help clients address their CECL compliance.
Generate forecasts of lifetime losses through Moody’s CreditCycle under the CECL standard for “reasonable and supportable”.
Obtain net present value (NPV) of forecasts with scenarios for consumer credit portfolios.
Custom econometric consumer credit loss forecasting models for CECL.
Powerful risk management, stress testing, and capital allocation tool for residential mortgage portfolios and RMBS.
Moody’s Analytics Credit Loss and Impairment Analysis Suite of credit risk models and data, economic forecasts, advisory services, and infrastructure solutions assists with expected credit loss calculations.
The CreditEdge platform is the premier model for managing the credit risk of your portfolio of listed firms and sovereigns, globally.
The Default & Recovery Database provides access to the most comprehensive default dataset in the market.
Leverage reasonable and supportable forecasts and scenarios to address CECL requirements.
The ImpairmentCalc software provides expected loss impairment calculations, incorporating data and scenario analysis for forward-looking evaluation under IFRS 9 and CECL guidance.
Moody’s Analytics ImpairmentStudio solution enables financial institutions to address the operational complexities of evolving credit impairment accounting standards.
Moody’s Analytics RiskBench solution is a global credit risk data community and data discovery platform that provides in-depth analytics and peer insights.
Moody's Analytics RiskCalc solution offers a comprehensive approach to assessing the default and recovery of private firms.
Moody’s Analytics RiskFoundation Impairment Suite is a strategic software platform that enables the end-to-end orchestration and automation of expected credit loss (ECL) calculations.
The Regulatory Module offers key data and analytical metrics on demand to help financial institutions manage their structured regulatory risk.