FEDS Paper: Current Expected Credit Losses (CECL) Standard and Banks' Information Production

Sehwa Kim, Seil Kim, Anya Kleymenova, and Rongchen LiWe examine whether the adoption of the current expected credit losses (CECL) model, which reflects forward-looking information in loan loss provisions (LLP), improves banks’ information production. Consistent with better information production, we find changes in CECL banks' financial reporting and operations. First, these banks' loan loss provisions become timelier and better reflect future local economic conditions.


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