Reduce CECL cyclicality

Although the CECL standard is intended to be countercyclical compared to the incurred loss standard, there is a concern within the banking community that CECL allowances will turn out to be procyclical. Since procyclicality undoubtedly depends on perfect foresight about the economy, it cannot be eliminated. Learn how you can minimize procyclicality by making certain choices about the macroeconomic scenarios, segmentation and modeling technique used for estimating your allowances.