Description

This session will cover:

1. Foundational elements: properly accounting for credit risk characteristics, including:

a. Importance of accounting for risk differentiation and rank ordering for pass-rated loans

b. Common flaws of risk rating systems

c. Potential financial impact on the ALLL

2. We will also discussed methodology matters, such as

a. Quantifying impact of methodology choices on CECL allowance balance at different points in the economic cycle, volatility

b. Length of reasonable & supportable (R&S) period

c. Scenario choice (1 or multiple) Criteria for methodology selection

d. Data availability and applicability

e. Portfolio composition

f. Firm size / complexity

Speaker(s):

• Anna Krayn, Senior Director, Head of Risk and Accounting Solutions – Americas, Moody's Analytics
• Masha Muzyka, CPA, CGMA, Senior Director, Moody's Analytics