Insights & News
Stay updated with our latest industry perspectives and company announcements.
…or the Value of Stress Testing. Here’s a simple way to think about the benefits of bank regulation and credit risk management: they can make good times even better, delay the bad times, and help soften the blow when things get tough.
With the uncertainty and possible economic harm surrounding the recently-announced tariffs—whether they stay, disappear, reappear, or mutate—bankers face the challenge of integrating effects into CECL and stress test estimates.
It’s been fifteen years since the last long and deep downturn. Alas, periods of calm are not proof of resilience against harm, and in fact, they may obscure risks that may define the next downturn.
Mayer Brown regulatory partner, Matt Bisanz, and CEO Andy Spero talk about trends and best practices for managing risk – and advice to those just starting out.
A common belief is that broader and deeper bank regulations decrease earnings and share value.
Would SVB’s, SBNY’s, and FRCB’s shareholders agree?
Nine initial impressions of the Fed’s report on SVB including why we anticipate more supervision and attempts to reverse the loosening of scrutiny in 2017 – 2020.
Climate Change, Extreme Weather and Loan Losses. We analyze differences in default rates, LGDs, and loss rates for mortgages in four recent and costly storms.
Since Silicon Valley Bank’s demise, many have been yapping about the importance of capital and capital ratios, but it’s never about capital. It’s always about liquidity!
Andy Spero explains what he concluded from the Fed’s discount window seemingly turning SVB away, and his thoughts on why the FDIC rushed to close SVB down.
We summarize the guidance, analyze the recent revisions, and outline the differences in the tailoring framework for CCAR Supervisory Expectations.
Recent Insights
Spero Risk President Interviewed on Risk Management Podcast
Matt and Andy talked about best practices for managing risk and trends in the industry and how Andy built a career in this fast-growing area, plus, what advice he has for those just starting out.
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The Seven Principles of an Effective Capital Adequacy Process
Spero Risk Associates has substantial experience with all aspects of CCAR, especially model development and validation. We have asked the questions, and we have successfully answered when others have asked. The seven principles of an effective cap…
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Three Components of Validation
We like to think of the three main components of validation like Cerebus – validation encompasses the past, present, and future. 1. Evaluation of conceptual soundness, including developmental evidence. 2. Ongoing monitoring, including process verif…
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Anticipated and Unanticipated Benefits of Loss-Forecasting
In anticipated direct events, identification and use of risk mitigants mean better preparation to reduce losses in analyzed situations: Precautions or ex ante actions that reduce the possibility of the considered situation occurring Insurance…
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Learning Opportunities from “A Christmas Story”
Learning is a benefit that is important enough to describe separately! Like much financial and credit model development, scenario analysis is research as much as development or construction. Scenario analysis leads to a better understanding of the …
Read MoreSR 12-7 and the Five Principles of Stress Testing
If CCAR/DFAST is the extent of a firm’s stress testing, then, (a) the firm does not comply with SR 12-7, particularly Principles 1 and 2, and therefore, Principle 5; (b) there are likely deficiencies in overall risk management and data governance/sys…
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