Spanning the probability distribution of forecasts and covering the expected lifetime of assets.
With over 35 years of independent forecasting and risk analysis experience, Oxford Economics is uniquely placed to provide economic scenarios and their associated probabilities to calculate expected credit losses under the CECL accounting standards. We provide an unbiased and transparent view of the forward-looking distribution for the economy.
Bespoke scenarios specifically for CECL
Oxford Economics offers a solution that specifically addresses the requirements of new accountancy standards, namely to provide an unbiased view of the forward-looking distribution and associated probabilities for the macroeconomic outlook.
Exploiting our forecast track record, the analysis of country economists, and the world’s leading globally integrated macro model, Oxford Economics produces robust forward-looking distributions for the key drivers of impairment across 85 countries that evolve in line with local and global risks.
Macroeconomic and financial variable outputs covering the key drivers of impairment, including GDP, employment, property prices, financial asset prices and interest rates. Fully consistent scenario results available for all US States and Metropolitan Statistical Areas (MSAs).
Reports that explicitly detail changes from the last set of scenarios based on our analysis of current trends and risks.
Scenarios are updated quarterly to reflect changes to the base case and emerging risk.
The methodology used to construct these forward looking distributions is similar to that used by major central banks when assessing the risks around their central projections.
Based on these robust distributions we derive coherent economic scenarios along with their probability. Crucially, our approach ensures that the only changes to scenarios from quarter to quarter are due to a transparent assessment of emerging or receding risks.
At the centre of our approach is our renowned Global Economic Model, which integrates individual country models through global assumptions about trade volume and prices, competitiveness, interest and exchange rates, capital flows and commodity prices.
The model’s unique open-architecture framework enables us to assess the impacts of adverse scenarios on economic indicators and a range of asset classes.
The Global Economic Model has been used by banks for stress tests published by a large number of the authorities around the world, include the Federal Reserve, the European Banking Authority, the UK Prudential Regulation Authority, the Australian Prudential Regulation Authority, the Hong Kong Monetary Authority and the Monetary Authority of Singapore.
To download sample data, please click here or to view a sample report, please click here
Why you can rely on us
Our extensive experience has helped institutions of varying sizes across the world construct and use multiple economic scenarios and their probabilities to calculate expected losses.
An acknowledged world leader in global forecasting and quantitative analysis, our roster of more than 2,000 clients includes leading companies across a range, of industries including financial services, consumer goods and retailers, industrial manufacturing and energy and professional services.
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