FFIEC 002: Identified Losses and No ACL at FBO Branches
FFIEC 002: Identified Losses and No ACL at FBO Branches U.S. branches and agencies of foreign banking organizations (FBOs) may elect not to maintain an Allowance for Credit Losses (ACL) at the branch level, but that election does not remove the need to identify credit losses and reflect them appropriately in regulatory reporting. For FFIEC 002 purposes, the key concept is that loans and similar assets must be reported net of identified losses, using either charge-offs or specific reserves that function like charge-offs for supervisory and reporting purposes. Regulatory guidance and reporting framework. The Federal Reserve is the primary federal supervisor for U.S. branches and agencies of FBOs and is the recipient of the FFIEC 002 report. The FFIEC 002 instructions and related Federal Reserve supervisory expectations require branches to maintain sound credit risk management and to report assets in a manner that reflects identified losses. Even when a branch does not ...