Insight-Perspectives

I’ve had several conversations with CECL validation clients over the past few months about model back-testing. Institutions often bring it up because an examiner or auditor asked about it, and I always try to shift the focus to why it matters beyond just checking a regulatory box, and how to build a practical approach that actually adds value. For a while, CECL back-testing didn’t feel all that relevant because losses were so low. But as certain portfolios start to show a lit

Let’s be real - no one really gets too excited about a model validation. For many model owners, it can feel like a frustrating drain on...

For many financial institutions, CECL implementation was a heavy lift - one that checked a regulatory compliance box and moved on. But the most effective institutions see CECL as more than an accounting requirement. They see it as a strategic tool. And the best way to ensure that tool is working as intended? A thorough, independent CECL model validation. In this post, we’ll explore how a robust CECL validation adds value far beyond compliance, enhancing reserve precision, rep