Mind the Gaap: US banks brace for $50–100bn capital hit

New loan loss accounting regime could shrink US banks' Common Equity Tier 1 ratios by 25–50bp

Platform step
Step into the unknown: banks are still evaluating the impact of Cecl

Some are calling it the most significant accounting change for the banking industry in over four decades.

The Current Expected Credit Loss (Cecl) rule, which was finalised by the US Financial Accounting Standards Board (FASB) on June 16, will require banks to immediately set aside the full amount of expected credit losses over the lifetime of a loan once it is originated. Currently, credit losses are only recognised in financial statements at the point of impairment.

"Cecl has changed the accoun

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