In comparison with the old system, we believe that the proposed new system is more compatible with financial institutions' allowance for loan and lease loss methodologies and rating-assessment processes.
The new system leverages off of many determinations and estimates banks already must make to comply with generally accepted accounting principles (GAAP), which means that banks should benefit from a more-efficient assessment process and improved clarity. We also believe the new system would increase consistency among the agencies in assessing the credit risk in a bank's commercial loan portfolio.