Optimizing CECL: Moving from no losses to an integrated risk framework
For financial institutions who are complying with CECL and have no meaningful losses or loan history, getting started can seem overwhelming. However, benchmark data can provide a useful starting point for an informed CECL estimate at both the input and output level.
Additionally, while the estimation of loan loss reserves is an accounting exercise, it is also a critical part of risk modeling for financial institutions. While the ACL absorbs expected credit losses, there can also be a financial impact through required provisions to and from the reserve and deteriorating credit conditions in the loan portfolio (evidenced through downward risk rating migration).
Join experts from Abrigo and Trepp on this webinar to learn:
- How to get started with no meaningful loan data or losses
- Ways to apply a simplified scorecard approach to help inform reasonable CECL estimation
- The influence CECL should have on other credit risk and lending operations