Insights & News
Recent Insights
Q1 2020 Large Bank CECL Reserves
Below are two graphs that show Q1 2020 credit reserves for large, domestic (mostly CCAR) banks—for all large banks reporting earnings as of April 24, 2020. So far, no bank on our list has delayed its CECL implementation–as permitted under the CARES Act. Both graphs show the initial CECL reserves, i.e., as of December 31, 2019/January 1, 2020…
Read MoreAlternatives to Unemployment as a Commercial Loan Loss Predictor
After reading our post, Unemployment as a Commercial Loan Loss Predictor, someone asked, “…what would be a better leading indicator than unemployment rate in your opinion?” At a national level, there are economic variables that lead bank C&I credit losses—they’re available for free at FRED—and we won’t completely discard…
Read MoreUnemployment as a Commercial Loan Loss Predictor
This the first in a sequence of three posts. The second describes alternatives to the unemployment rate for C&I loss forecasting, and the third one provides more evidence why the unemployment rate is a poor choice for C&I loss forecasting. Recently, we were surprised to learn that many banks use a forecasted unemployment rate as a predictive…
Read More2017 – 2019 Federal Reserve and Company Run CCAR Results
Almost four years ago, we aggregated and published the Fed’s and Companies’ 2016 CCAR results. We’re surprised by the continued interest in those nearly four-year-old numbers; so, we asked one of our analysts to generate similar graphs for 2017, 2018, and 2019. Please note that a few observations from companies are missing; those…
Read MoreIs the Third Time a Charm for Effective Risk Management?
There’s an old curse that seems very appropriate today: “May you live in interesting times.” Indeed! With that in mind, consider both (1) an exercise of ranking hypothetical catastrophes and (2) recent history since 2001. Imagine if last year someone provided a list of ten plausible but low-possibility events that could harm the nation, the economy…
Read MoreQ1 2020 Large Bank CECL Reserves
Below are two graphs that show Q1 2020 credit reserves for large, domestic (mostly CCAR) banks—for all large banks reporting earnings as of April 24, 2020. So far, no bank on our list has delayed its…
Read MoreAlternatives to Unemployment as a Commercial Loan Loss Predictor
After reading our post, Unemployment as a Commercial Loan Loss Predictor, someone asked, “…what would be a better leading indicator than unemployment rate in your opinion?” At a national…
Read MoreUnemployment as a Commercial Loan Loss Predictor
This the first in a sequence of three posts. The second describes alternatives to the unemployment rate for C&I loss forecasting, and the third one provides more evidence why the unemployment rate…
Read More2017 – 2019 Federal Reserve and Company Run CCAR Results
Almost four years ago, we aggregated and published the Fed’s and Companies’ 2016 CCAR results. We’re surprised by the continued interest in those nearly four-year-old numbers; so, we…
Read MoreIs the Third Time a Charm for Effective Risk Management?
There’s an old curse that seems very appropriate today: “May you live in interesting times.” Indeed! With that in mind, consider both (1) an exercise of ranking hypothetical catastrophes and (2)…
Read More