Implications of Using Scenario-Based CECL

The following are the implications of using a Scenario-based CECL Computation method:

• Scenario-based CECL Computation is applicable only for Forward Exposure and Specific Provision methodologies.
• For Cash Flow, Roll Rate, and Provision Matrix methodologies, CECL for different Scenarios are the same.
• PD Model only generates a weighted average PDs. This may not be used for Scenario-based CECL computations.
• CECL Reconciliation cannot be performed on CECL runs, which are Scenario-based.
• The performance of CECL is impacted.