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Why financial institutions are rethinking 2D risk rating models

Abrigo

This article covers these key topics: The difference between 1D and 2D risk rating models How CECL has impacted the necessity of a dual approach Why the LGD variable is so difficult to pinpoint Does your risk rating framework align with your CECL needs? Transform CECL data into stress testing insight.

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Best Practices for Managing Credit Risk in Recession

Abrigo

Key Takeaways This recession is significantly different than the 2008 financial crisis, creating a unique credit environment for financial institutions. Economic downturns alter the credit memo's content and process to capture credit risk. Mitigate credit risk and drive growth – even in a recession.

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The most popular CECL, ALM, & portfolio risk blogs of the year

Abrigo

The most-read portfolio risk blogs in 2023 Probability of default, CECL model validation, and stress testing were among Abrigo's top blogs on ALM, CECL, and portfolio risk this year. You might also like this webinar, "Unraveling risk rating: Making sense of your best early warning tool."

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CECL Kickstart Questions Answered

Abrigo

Experts answer CECL questions from 2023 adopters Participants in Abrigo's CECL Kickstart webinars asked consultants their questions leading up to the 2023 CECL implementation date. Takeaway 1 Financial institutions brought practical questions to Abrigo consultants during the CECL Kickstart webinar. . CECL Deep Dive.

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CRE risk management: Identify and manage concentration risk

Abrigo

While there are no specific examples that are prescribed triggers, the observations above illustrate the need for banks to consider concrete indicators when evaluating commercial real estate risks in specific markets. Learn more about stress testing with this whitepaper, "Stress testing: Managing capital levels and credit risk."

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Making Qualitative Adjustments and Stress Testing in Uncertain Economic Times

Abrigo

Credit risk operations, such as the allowance and stress testing, are not exempt. When making allowance for loan and lease loss (ALLL) or allowance for credit loss (ACL) calculations, financial institutions must consider the uncertainty presented during our current economic and societal times. CECL vs. ILM. learn more.

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Global cash flow analysis – common mistakes & helpful hints

Abrigo

As the OCC’s Internal Guidance from April 9, 2008, explains: An analysis of the guarantor’s global cash flow should consider inflows, as well as both required and discretionary cash outflows from all activities. Different people calculating GCF in different ways will result in poor loan, pricing, and risk rating decisions. Learn More.