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Dynamically Integrating CECL into Forecasting and Stress Testing Processes
- Significant operational efficiencies and computational accuracy when using consistent data and behavioral models to generate cash flows and ECLs
- Performing CECL calculations in a dynamic forecast facilitates more detailed and consistent output metrics including provision expense and ALLL contributions for the current and evolving balance sheet across varying (stressed) economic conditions
- Extend the process for consideration in strategic origination pricing and profitability analysis; use to produce business unit pricing tear sheets inclusive of CECL charges
- Naturally allows for the incorporation of management actions and response in order to optimize conditional capital adequacy given practical and regulatory constraints for each business strategy and what-if scenario
