To Early Adopt or not to Early Adopt

The Financial Accounting Standards Board (the FASB) is expected to issue a final Derivatives and Hedging Update by the end of this quarter (Aug/Sept, 2017).  In this research piece, we discuss our thinking behind pros and cons of early adoption of new rules and the steps to complete if an institution decides to early adopt.  We also discuss an important change under a new “last of layer” method that will make it easier for financial institutions to hedge a portfolio of pre-payable assets such as MBS and ABS.

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