Fed’s CECL relief falls short – regional banks

Banks won’t need to factor loan-loss estimates into DFAST through 2021; no word yet on CCAR

$20 note

The US Federal Reserve has said banks will not have to factor the impact of tough new accounting standards into the less intensive iteration of its supervisory stress tests until 2022 – a move designed to benefit mid-tier lenders, who had lobbied for the change. But although the relief is welcome, dealers say, many continue to insist the methodology could lead to a credit freeze were the economy to stumble badly.

On December 21, 2018, the Fed announced that the treatment of loan-loss allowance

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