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Moody's Analytics Senior Director Cristian deRitis and Equifax Chief Economist Amy Crews Cutts discuss the potential impact of the hurricanes on consumer credit.

Hurricanes Harvey, Irma, and Maria wreaked havoc across Texas and Florida. Financial lenders, dealers and others with exposure to consumer credit conditions are wondering what the full impact will be. Moody's Analytics Senior Director Cristian deRitis and Equifax Chief Economist Amy Crews Cutts discuss the potential impact of the hurricanes on consumer credit.

Insights include:

  • The impact of hurricanes on local and national economies
  • Speed of recovery and duration of impact on labor and energy markets
  • Use of Hurricane Sandy as a baseline for comparison for consumer credit
  • Impact on auto loans, bank and credit cards, first mortgages and HELOCs

Related Articles

Moody's Analytics Webinar: Briefing on the CCAR Scenarios

The Federal Reserve will release its scenarios for the 2019 CCAR stress test. Join Mark Zandi and Cristian deRitis as they discuss the narratives behind the Fed’s scenarios under forecasts of detailed economic variables.

February 11, 2019 WebPage Mark ZandiDr. Cristian deRitis
Webinar-on-Demand

Moody's Analytics Webinar: Briefing on the CCAR Scenarios

The Federal Reserve have released its scenarios for the 2019 CCAR stress test. Listen as Mark Zandi and Cristian deRitis discuss the narratives behind the Fed’s scenarios under forecasts of detailed economic variables.

February 2019 WebPage Mark ZandiDr. Cristian deRitis

Deconstructing Scenario Weights for CECL

In this paper we present the theoretical motivation behind these weights and suggests reasonable ways of choosing these weights in practice.

February 08, 2019 Pdf Dr. Sohini ChowdhuryDr. Cristian deRitis
Article

Gauging CECL Cyclicality

In this paper, we provide empirical support for the conclusion that the CECL standard will be less procyclical than the incurred loss standard.

December 2018 Pdf Mark ZandiDr. Cristian deRitis
Article

Mean Reversion in CECL: The What and the How

Mean reversion is an important facet of the upcoming Current Expected Credit Loss accounting standard. Under CECL, lenders will need to estimate, and set aside an allowance for, the expected lifetime loss for each loan they book at the time of origination.

September 2018 WebPage Dr. Sohini ChowdhuryDr. Cristian deRitis
Article

CECLnomics and the Promise of Countercyclical Loss Accounting

Historically, accounting regulations have not served as regulatory tools in bank examiners’ toolkits. Economic capital calculations, leverage ratios, and stress tests are used to assess capital adequacy, while the primary purpose of financial statements has been to inform investors of the recent performance

September 2018 WebPage 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.

Whitepaper

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

Starting in 2020, the Current Expected Credit Loss (CECL) accounting standard will require financial institutions to reserve for estimated lifetime losses on loans and leases as soon as they are originated, and incorporate macroeconomic forecasts formally into their loss allowance estimates for the first time.

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
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