FASB bins regional bank CECL proposal

Plan would have allowed smaller lenders to reduce capital impact of expected losses


US regulators have dealt a blow to regional banks’ hopes of easing the capital impact of forthcoming accounting standards, unanimously rejecting a proposal that would have reduced the capital banks need to set aside to cover expected losses.

The Current Expected Credit Loss (CECL) standard will require banks to hold reserves against expected lifetime losses for all loans once it goes into effect on January 1, 2020. Banks fear the shift will result in a significant capital hit as retained

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