Optimism fades to uncertainty on banks’ CECL proposal

As crunch FASB meeting approaches, most decline to speculate on outcome

Regional banks are pinning their hopes for an easing in the Current Expected Credit Loss (CECL) accounting standard on a proposal that would free a portion of lifetime expected losses from capital requirements. That proposal will be taken up at a January 28 roundtable with the Financial Accounting Standards Board.

With CECL now less than a year away, banks are in general dread that their capital will swing higher and lower if they reserve against expected losses over the life of all loans, as