Join our experts as they review the business challenges that CECL presents beyond the reporting date numbers.
Moody's Analytics subject matter experts, Laurent Birade, Olivier Brucker and Ed Young discuss the role of capital planning and stress testing after CECL. Also discussed are forecasting options for CECL estimates and understanding the impact of COVID-19 scenario, including the results of a benchmark study.
The traditional loss-minimizing approach to managing corporate trade credit can keep write-offs low but may be overly conservative.
In this paper, we propose an alternative simple, coherent methodology that allows us to forecast and stress test the entire balance sheet and income statement for all of the roughly 6,000 banks in the United States consistently.
The COVID-19 pandemic has pushed many commercial entities to increase their borrowing and drawdown on their lines of credit. We use bank call report data to analyze the potential impact to capital levels at US financial institutions.
During the last financial crisis, some of the better-performing commercial credits were originated under extremely conservative origination policies This paper explores risk rating options and advises what you can do now to enhance your origination process.
Traditionally, corporate trade credit limits have been set based on customer size, an internal or external credit score, and a qualitative sense of risk appetite. These limits have been effective in minimizing write-offs, principally because they are conservative.
Recent CECL impact disclosures point directly to credit cards as the largest driver of the allowance. We can confirm those recent disclosures by looking at the consumer default volumes chart in Figure 1,which clearly point to the credit card segment as being one of the largest contributors of loss today.
Join our Moody's Analytics experts as they focus on the implementation challenges of the new accounting standards – CECL, IFRS 9, IFRS 17 and LDTI.
This paper explores the CECL standard’s background, the choices community banks, regional banks, and credit unions face, and some suggested approaches for dealing with these challenges.
While many institutions are currently in the throes of implementing the current expected credit loss (CECL) accounting standard, some are thinking ahead and some that are not. CECL will have an unavoidable impact on management disclosures, specifically around explaining period-over-period changes in allowance.