Volume 4 - Deep Dive into the 'Expected Credit Loss' (ECL) modeling area of CECL Overlap Between CECL and IFRS9
Risk appetite is likely to be impacted by the introduction of Current Expected Credit Loss (CECL). The modeling area of CECL, is arguably the part of the regulation that necessitates the inclusion of the firm's risk analysis. CECL is not an attempt to capture unexpected or remote catastrophic events, these will continue to be accounted for under regulatory capital. In this article, we focus on the expected losses and changes to allowance calculations that will allow an institution to better account for these types of losses.