Macroeconomic Scenarios Service
Fathom’s Macroeconomic Scenarios Service is designed to help banks and other financial institutions operating under the IFRS 9 and CECL accounting standards to meet their regulatory obligations, and to manage risks by better understanding their exposure to different economic conditions. The Fathom service provides six short- and long-term scenarios each quarter, covering the key macroeconomic variables required for expected credit loss (ECL) calculations.
This service has two levels: Essential, which offers everything that many financial institutions will need to calculate loan loss provisions and comply with IFRS 9 and CECL regulations, and Enhanced, which is a bespoke service offering greater flexibility with the key package features, as well as additional country and variable coverage. The differences between the two services are explained below.
To find out more about how our scenarios service can help you with your regulatory compliance and risk management, request a meeting below.
Essential service
- Six probability-weighted scenarios, updated each quarter
- Scenarios and their probabilities decided by Fathom’s Forecast Committee
- Calculations supported by Fathom’s fully integrated suite of macro models and central forecast
- Data output provided in Excel and CSV
- Supporting written documentation, including scenario narratives; key driver explanations; justification for probability weights; other evidence
- Coverage of core countries: US, euro area, UK
- Eight core variables covered for each of these countries, and two global variables
Enhanced service
Everything included under the Essential service, plus:
- Bespoke scenarios chosen by the client
- Additional country coverage, as needed
- Additional variable selection, as needed
- Flexible delivery schedules aligned with internal reporting timetables
- Fathom on call so you can speak to our Forecast Committee members
- Updated scenarios when major events demand it, even if outside the normal quarterly round
- Scenarios and data are accessible through a Tableau dashboard
Why Fathom?
Fathom has been providing rigorous and independent macroeconomic analysis and forecasts to the private sector and to various government agencies and departments of the world’s major economies for more than two decades.
- Fathom stands out among other economic providers by having a fully integrated global macroeconomic model. GESAM (Fathom’s Global Economic and Strategic Allocation Model) covers more than 80% of global GDP. It is grounded in theory, estimated empirically and incorporates data that stretch back 150 years. GESAM allows us to model long-term trends with confidence.
- Our central forecast and other scenarios are also supported by analyst-enhanced, short-term nowcasts, which ensures that scenarios always reflect the most up-to-date information.
- We have built up over many years a suite of datasets which can identify emerging financial risks to the global economy and cross-country economic and financial linkages.
Taken together, these powerful proprietary tools allow us to offer a world-class macroeconomic scenarios service, head-and-shoulders above the competition. We can offer more realistic economic scenarios, assign more accurate probabilities and produce more joined up and forward-looking forecasts. We can clearly identify and explain the drivers of each scenario, and the assumptions that underpin them, giving clients and regulators confidence in the process.
Our Enhanced service goes further by designing scenarios around your organisation’s specific needs. We will deliver your scenarios when and how you need them with flexibility to reflect big changes as and when they occur even if that happens in between the usual quarterly cycle. Fathom is independent, with no hidden agendas, and we call things how we see it – which is why private sector and government clients have come to us for trusted and ongoing advice for over 20 years.
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For more information about our Macroeconomic Scenarios Service or to discuss your needs and how we can help, please fill out the form below.
