CECL fans and foes cross swords on Capitol Hill
Dispute over economic impact rages on despite agreement on capital relief
Faultlines over the impact of a new accounting standard for loans were evident during a congressional hearing in Washington, DC, on December 11.
On one side of the debate were those who claim that the Current Expected Credit Loss (CECL) accounting standard will be procyclical, causing banks to tighten credit as a downturn gathers momentum.
“Our research demonstrates that these changes are procyclical,” said Bill Nelson, chief economist at the Bank Policy Institute (BPI), an industry lobby
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