CECL Term PD

Implementing Term PD for CECL Standards

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FASB’s new accounting standard, ASU No. 2016-13, commonly referred to as “CECL,” will require banks to calculate continual, life-of-loan estimated credit losses on entire commercial & industrial (C&I) portfolios. Although mandatory adoption begins in 2019, this unprecedented change from the longstanding incurred loss model will result in significantly more loan data-collection and analysis than ever before; banks need to begin to develop or enhance models and infrastructure immediately.

RapidRatings has developed a series of Term Probabilities of Default (PDs), a key requirement for many banks in estimating forward-looking losses. Our Term PDs run 12 months to 10 years on public and private non-financial companies.

  • Initiate PD x LGD (Loss Given Default) as the preferred C&I model
  • Provide an authoritative second opinion on legacy or newly implemented internal or third-party systems
  • Avoid compiling and parsing large-scale statistics on which to base PD assessments

Request a Demo

Ready to see how you can mitigate risk and capitalize on opportunity?  Request a demo today.

Request a Demo
"According to the OCC, of the $4.1 trillion in Shared National Credits commitments most recently outstanding, fully half matures in Years Four and Five; nearly 10% matures even later."

Additional Resources

WHITEPAPER: CECL & Term Probability of Default

Learn how this new solution delivers company-specific and pooled PDs on an annual basis out to ten years comprehensively and cost-effectively on any bank’s Commercial and Industrial portfolio or Small Business Loan portfolio, at any scale.

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BLOG: Begin CECL Planning Now: IFRS 9 May Help Banks to Prepare

Read our blog to understand financial institutions’ starting point for moving towards regulatory compliance with CECL.

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