Are you confident in your CECL model’s accuracy and performance? This course guides you through the crucial process of back-testing, equipping you with the tools and insights to assess your model’s effectiveness and ensure its accuracy in your first year of CECL implementation.
Gain valuable knowledge and skills in:
- Back-testing fundamentals
- Short-term back-testing
- Long-term back-testing
- Reversion rate validation
- Model improvement strategies
Seize this opportunity to master back-testing and ensure your CECL model’s success in your first year.
What You’ll Learn
- Identify Back-Testing Fundamentals: Learn the role of back-testing in evaluating CECL models, including back-testing horizons and reversion rate calculation.
- Conduct Short-Term Back-Testing: Assess CECL model accuracy for individual loan cohorts using current losses compared to forecasted losses, as well as identify potential biases in short-term loss forecasts.
- Employ Long-Term Back-Testing: Evaluate overall model performance over extended periods using metrics like cumulative loss rate and provision coverage ratio and identify trends in long-term loss forecasts.
- Confirm Reversion Rate Accuracy: Validate estimated reversion rates for different loan categories and take corrective actions if necessary.
- Enhance CECL Modeling: Analyze back-testing findings, identify areas for improvement, and develop a plan for implementing model refinements.
Who Should Attend
Employees from financial institutions who are involved in CECL processes will benefit from this informative session.
Field of Study: Accounting, Auditing
Skill level: Intermediate
Prerequisites: Experience in back accounting, lending, or analytics. Knowledge of and experience with the CECL Standard.
Advanced Preparation: Knowledge of and experience with the CECL Standard.
