Fed approves rules change on credit losses

The Federal Reserve Board announced it had approved a proposal to revise its regulatory capital rules to address and provide an option to phase in the regulatory capital effects of the new accounting standard for credit losses, known as the “Current Expected Credit Losses” (CECL) methodology.

The proposal addresses the regulatory capital treatment of credit loss allowances under the CECL methodology and would allow banking organizations to phase in the day-one regulatory capital effects of CECL adoption over three years. The proposal would revise the Board’s regulatory capital rules and other rules to take into consideration the new accounting standard.

In June 2016, the Financial Accounting Standards Board issued a new accounting standard for credit losses that includes the CECL methodology and replaces the existing incurred loss methodology for certain financial assets. The effective date of the standard varies for different banking organizations and may be early adopted in January 2019. The Board is coordinating this rulemaking with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

Read the full release


Related Posts

Previous Post
Northern Trust HFS partners with Hazeltree on cash optimization service
Next Post
Competition in collateral trading notes, structured products and collateral packaged substitutes (Premium)

Related Posts

Fill out this field
Fill out this field
Please enter a valid email address.


Reset password

Create an account