CECL Methodologies: Pros and Cons for Your Portfolio
Given that the CECL model is non-prescriptive, banks and credit unions have flexibility in choosing the right CECL methodologies for their institution’s unique data situation. This flexibility often leads financial institutions to ask one simple question: Where do I begin?
In this complimentary infographic, learn about the 7 methodologies available to use and when they are or are not recommended.
The methodologies covered include:
- Static pool analysis
- Discounted cash flow
- Migration analysis
- Transition matrix
- Vintage analysis
- WARM/Remaining life
- Probability of default/Loss given default