Banks push for capital changes as CECL provisions soar

Spike in set-asides exposes fault lines between new accounting standards and Basel rules

A growing focus on op risk

Credit risk capital rules need to change in light of the shift to the Current Expected Credit Loss accounting standard, which entails earlier recognition of potential loan losses, say bankers and academics.

CECL, which took effect on January 1, requires lenders to set aside enough reserves to cover expected losses over the entire lifetime of a loan, from the point of origination. The 22 largest US banks booked $42.5 billion in credit loss provisions in the first quarter, three-and-a-half times

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Calibrating interest rate curves for a new era

Dmitry Pugachevsky, director of research at Quantifi, explores why building an accurate and robust interest rate curve has considerable implications for a broad range of financial operations – from setting benchmark rates to managing risk – and hinges on…

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