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

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here