News & Insights


SEPTEMBER 22 – 23. 2020

SMARTER Risk Management is delighted to announce its participation in the sponsoring of the ABRIGO “THINK BIG. MANAGE RISK. DRIVE GROWTH. “ 2020 Virtual Conference.

Visit for all the details.




Model Validation Changes Under CECL - Moving from Incurred Loss to Expected Loss

Model Validation has been going through a maturing process since the 2011 Interagency Guidance (2011-13) was issued and applied to the Allowance for Loan and Lease Losses (ALLL) model. And because every model is different. There have been some misunderstandings and misinterpretations of what validation means for ALLL.
Now moving forward Validation is going to become more robust and complex as it moves from Incurred Losses to Expected Losses. Being proactive makes all the difference when it comes to challenges and surprises. There are certain activities where being boring and predictable in a bad thing…. This is one of them.

ALLL/CECL & COVID-19 - Reserving for Loan Losses During a Pandemic

Until recently determining the reserve has been a fairly straightforward and predictable event. Now as the financial industry enters into a “virus driven” recession. The time has come for Bankers to ask themselves two critical questions. “How do I reserve for this, given all the uncertainty that exists, and the (as of right now) lack of actual losses? And how do I support the reserve decisions I make?”

This article discusses ways to address the reserve over the next few quarters. By reviewing the current situation, what is unpredictable and predictable about it.

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Latest From The Get SMARTER Blog

Remembering Why We Care About Model Risk

A few weeks ago, I was listening to a Webcast by Jos Gheerardyn, the CEO of entitled Model Risk Management during Periods of Stress. Jos has created a company that provides firms with the ability to perform model validation using an A.I. based platform, a very unique and innovative approach. Jos and I are focused on model risk management but from different, yet complementary, vantages. As such, I am always interested to what is doing because what they are doing is where the rest of us will be heading.

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Managing Risk in a Statistically Noisy World

We are bombarded with statistics every day. If you turn on the news (not always recommended) you will hear about the unemployment rate, the stock market, COVID-19, the election, etc… And at work, we have statistics coming at us from all sides.

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The Fuzzy Side of Risk

In reality risk and risk management are soft subjects resulting in approximations, guesstimations, probabilities and other “uncertainties”. These uncertainties result in people having to make decisions about how to act.

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The Impact of Risk Memory Decay

Why don’t we (collectively) learn from the past? Why do we dismantle programs and safeguards as we move further away from the risk event? Why do we make statements like, “I’ve never experienced this before”, or “This has never happened” when there is proof of a risk that materialized into a flood or pandemic or recession, often within the past 100 years.

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Executives are People Too- Effective Leadership through the Pandemic

Bankers are now entering the phase of the pandemic where things will start to intensify. Until now the deferments and the delays in recognizing troubled and defaulted credits (as mandated by the CARES Act) have allowed us to focus on the customer. The social safety net (as enacted by Congress) has allowed many, but not all, people to keep up with their expenses. The myriad of actions taken by the government in March have pushed out the day of reckoning (financially, at least) into the late fall or early next year.

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