By Julie Stackhouse, Executive Vice President
This post is part of a series titled “Supervising Our Nation’s Financial Institutions.” The series, written by Julie Stackhouse, executive vice president and officer-in-charge of supervision at the St. Louis Federal Reserve, appears at least once each month.
Banks big and small are busy preparing for a new accounting standard, the current expected credit loss model, or CECL. The main goal of the new standard is to ensure that banks are setting aside adequate reserves to cover expected losses on assets.
This month, I am pleased to announce a new resource designed to help banks prepare for CECL: the CECL Resource Center. This website is responsive to the many requests from community bankers for a “one-stop” resource for information about CECL.
While targeted to bankers, there is plenty of information that may be useful for journalists, industry insiders and other interested stakeholders. Users of the website will find background information about CECL and its implementation and spreadsheet examples of methodologies appropriate for community banks. They’ll also find resources to help community bankers stay abreast of news, supervisory guidance and relevant research and analysis.
At a high level, the site offers information around the following areas:
St. Louis Fed Senior Examiner Larry Sherrer explains the background and objectives of the accounting standard in his essay, Why CECL? This section also covers:
This section includes news and updates from the Financial Accounting Standards Board (FASB) and the federal banking agencies, along with research and analysis from the Federal Reserve System, government agencies and private sector research companies. Visitors can also find supervisory guidance from the FASB, the federal banking agencies and the Securities and Exchange Commission.
Additionally, users can access relevant webinars from the Federal Reserve and other regulators, preparation advice, and frequently asked questions from accounting organizations and industry trade groups.
Under this tab, you’ll find Excel spreadsheet examples of methodologies that are considered by both standard setters and supervisory agencies as appropriate for smaller and less complex organizations. The CECL standard accommodates various methods. This is intended to allow management to have flexibility in establishing and managing information about loss estimates in a way that best reflects the organization’s credit risk.
My hope is that this resource will make the transition easier for community banks. We are committed to keeping the site current. We will also soon release a feature that sends registrants an email whenever the website is updated.
Some questions are hard to answer through website resources. In those cases, interested parties can email us at firstname.lastname@example.org.