Loan-Loss Allowance Statement Near

The federal banking agencies are close to finalizing a new policy statement on allowances for loan losses that is expected to be issued by early December.The new statement replaces a 1993 ALL statement and eliminates the use of "benchmarks" that some institutions improperly adopted, according to Zane Blackburn, chief accountant of the Office of the Comptroller of the Currency. "We included a new section on estimating credit losses," Mr. Blackburn told a banking conference sponsored by the American Institute of Certified Public Accountants. "It discusses how the allowance is measured, including significant judgments made in the process. .... We supplemented this whole statement with interpretive answers to frequently asked questions." The answers cover 16 questions, he said.