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CECL will have the most significant impact on American banking since the Dodd-Frank Act was adopted. Models currently being developed indicate that bank profitability—and bank department profitability—will be affected as institutions charge for credit loss provisions on new loans and credit downgrades on existing loans.
GCD is working with Accenture and the IIF to help U.S. financial institutions benchmark their CECL models as they are developed.
Step 1 was a deep CECL Methodology survey sponsored by Global Credit Data, the IIF and Accenture. The survey provided comparative information on bank’s planned methodologies for implementation of CECL. The questions focused on credit data and modeling for the C&I, CRE and Consumer portfolios. A public version of the survey results is available here.
Step 2 is a benchmarking study, similar to the highly successfull benchmarking study GCD has run for IFRS 9. A first round of the study ran in April to July 2019, with results returned back to participating banks.
A second round of the study is running with the following timelines:
1. Data template to be sent in to GCD by latest November 15th, 2019
2. Data return by GCD to participating banks by December 18th, 2019
The latest version of the template is available here.
NOTE FOR MODELLERS:
GCD has the world largest database collecting data related to credit failures (default) and their recoveries. The data dates back to 1998, allowing for meaningful statistics in terms of type of borrower, time and size of exposure at default and collateral recovery rates.
Check our LGD & EAD platform for more information.