Quantitative Considerations for the ALLL

Under current accounting and regulatory guidance, financial institutions today face a tension between the interests of safety and soundness stakeholders and those of shareholders and other users of financial statements. As a consequence, many institutions are using a larger-than-normal qualitative adjustment to the allowance to create sufficiently robust reserves to satisfy different stakeholders.

In this paper, Garver Moore, a risk management consultant at Sageworks, describes how institutions can use quantitative approaches that result in a more defensible, reasonable and responsible reserve level.

 

Download to learn:

  • Techniques for setting qualitative adjustment policies that provide a firmer basis for allocations
  • How to use these approaches in preparing for CECL's reasonable and supportable forecasts

Download the Whitepaper