Leveraging predictive models: The right approach for your institution?

By Lauren Smith

Predictive models will have a direct impact on an institution’s ability to support the CECL estimate. Given this, institutions should thoroughly evaluate the costs and benefits of using a modeled versus a non-modeled approach. Predictive models require significant investment, including upfront development and validation as well as ongoing maintenance. However, the benefits of leveraging predictive models include a streamlined reserving process and greater transparency into a potentially volatile estimate.

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A successful CECL implementation begins with a holistic approach

By Lauren Smith

The Current Expected Credit Loss accounting standard (CECL) replaces the incurred loss model with a lifetime expected credit loss estimate, which will result in significant changes to financial institutions’ reserving process. Many industry experts consider CECL to be the biggest change to bank accounting ever. Is your institution prepared for the change, or do your current systems and processes fall short? A successful transition will include a holistic approach, but how will your institution get there?

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8 tips for the CECL transition

By Lauren Smith, CPA

Industry experts are calling CECL one of the most significant changes for financial institutions. Some have even gone so far as to hail CECL the “biggest change – ever – to bank accounting.” Nonetheless, the Financial Accounting Standards Board (FASB) and banking regulators assert that institutions will be able to leverage current risk management and reserving practices as a basis for implementing CECL. To help, we’ve outlined 8 considerations for your transition to CECL.

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Our Most-Read Blog Posts of 2016

By Kendall Reischl

2016 review banner in wood type

As we close out the year, we’re sharing our most-read blog posts from the past 12 months. Here’s the list from 2016, arranged in chronological order. We’re looking forward to seeing you back here on the blog next week!

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The CECL Conundrum for Lenders: Which Loss Forecasting Methodology to Use?

By Regan Camp, Principal Consultant, SS&C Primatics

Vintage toned Wall Street at sunset, NYC.

The Financial Accounting Standards Board (FASB) issued the final Current Expected Credit Loss standard, or (“CECL”) on June 16, 2016. Many lending institutions are likely to experience a “shock to the system” because of significant changes to the end-to-end reserving process for financial instruments measured at amortized cost.
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Blast From the Past: Lessons Learned From the Largest Bankruptcy in US History

By Dalvin Estrada

Business graph with arrows tending downwards

September 2016 marks eight years since Lehman Brothers filed for bankruptcy. The anniversary was acknowledged by former employees who still think fondly of the work they did for one the world’s largest investment banks. The filing remains the largest bankruptcy filing in US history, with $639 billion in assets and $619 billion in debt. Its assets far surpassed those of previous big bankruptcies like WorldCom and Enron.

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Survey: Impact of CECL Among Banks Making Transition

By Kendall Reischl

We’ve seen and heard a lot of industry talk lately about CECL (Current Expected Credit Loss). Over the past few months, a number of industry professionals have given their opinions and recommendations on what banks need to do to prepare for the CECL transition. However, most of this commentary hasn’t been from those people who will be most affected by CECL – individuals working at banking institutions.
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