Applying new rules for calculating credit losses group provisioning based on the CECL model

HMS offers assistance to banks and credit facilitating bodies in applying new rules for calculating credit loss group provisioning based on the CECL model – in accordance with the Bank of Israel’s requirements

Following a new standard published by the American FASB in June 2016 regarding Credit Losses in Financial Instruments (ASU 2016-13) – the Bank of Israel directed banks in Israel to speedily prepare regarding this issue, and  to gather any relevant data for the purpose of this.

The new standard significantly changes the accounting methods of handling credit losses recognition and measuring. In accordance with the new approach, following the new CECL (Current Expected Credit Loss) model, the requirement for immediate recognition of predicted credit losses throughout the financial assets’ lifetime is to begin upon the creation/purchase of the asset.

  • The implications of this on the information system for the management of credit risk may be far reaching, due to the deepening of the database and the expected carrying out of data analysis using new technics which are based on credit facilitating date. Additionally, new models are expected to be used for the carrying out of long and short term projections.
  • HMS has a vast knowledge and accumulated experience in applying group-based debt repayment orders in the field of Banking.

More information>>>

Font Resize