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    Stress Testing Used-Car Prices

    In this presentation we presented a quantitative methodology for incorporating economic factors into car price forecasts.

    In this presentation we presented a quantitative methodology for incorporating economic factors into car price forecasts.

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    Presentation

    Expanding Roles of Artificial Intelligence and Machine Learning in Lending and Credit Risk Management ‍

    With ever-expanding and improving AI and Machine Learning available, we explore how a lending officer can make good decisions faster and cheaper through AI. Will AI/ML refine existing processes? Or lead to completely new approaches? Or Both? What is the promise? And what is the risk?

    November 2019 Pdf Dr. Douglas DwyerDr. Tony Hughes
    Article

    Conservative Banks Do Not Need Conservative Models

    When banks manage risk, conservatism is a virtue. We, as citizens, want banks to hold slightly more capital than strictly necessary and to make, at the margin, more provisions for potential loan losses. Moreover, we want them to be generally cautious in their underwriting. But what is the best way to arrive at these conservative calculations?

    October 2019 Pdf Dr. Tony Hughes
    Article

    Model Validation Need Not Be a Blood Sport

    The traditional build-and-validate modeling approach is expensive and taxing. A more positive and productive validation experience entails competing models developed by independent teams.

    September 2019 Pdf Dr. Tony Hughes
    Article

    Will CECL Ultimately Be Worth All the Fuss?

    The industry is currently a hive of CECL-related activity. Many banks are busily testing their systems or finalizing their preparations for the go-live date, which is either in January 2020 or somewhat later, depending on the organization. Some are still making plans for implementation, and the rest are worried that they should be.

    August 2019 Pdf Dr. Tony Hughes
    Article

    The Real Value of Stress Testing: Has CCAR Been Validated?

    The theory that banks are now safer because of CCAR, though, has not yet been tested.

    July 2019 Pdf Dr. Tony Hughes
    Article

    CECL, IFRS 9 and the Demand for Forecast Stability

    Loan-loss provisioning models must take a variety of economic and client factors into account, but, with the right approach, banks can develop sensible loss forecasts that are more accurate and less susceptible to volatility.

    June 2019 WebPage Dr. Tony Hughes
    Article

    Climate Change Stress Testing

    As evidence of climate change builds and threats materialize,data will be invaluable in creating a framework for making future credit decisions.

    June 2019 Pdf Dr. Tony Hughes
    Article

    Human Versus Machine: The Pros and Cons of AI in Credit

    In recent years, attention has increasingly turned to the promise of artificial intelligence (AI) to further increase credit availability and to improve the profitability of banks and other lenders. But what is AI?

    May 2019 Pdf Dr. Tony Hughes
    Article

    Finding a CECL Solution for Smaller Banks

    Good-quality CECL projections can be developed using high-quality data that is available free of charge.

    April 2019 Pdf Dr. Tony Hughes
    Article

    Commercial Lending Imbalances and the Looming Recession

    Stress testing, up until now, has basically been a theoretical exercise. Growth has been slow but steady and the imbalances that can trigger recessions have largely been absent. However, with many now calling for a 2020 U.S. recession – and with Brexit looming – we may soon find out whether stress tests actually work when applied in the real world.

    March 2019 Pdf Dr. Tony Hughes
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