c. myblog

November 5, 2015

Observations from ALM Model Validations: Optimistic New Volume Rate Assumptions

When running static or dynamic balance sheet income simulations, assumptions regarding the interest rates received on new business are needed. On the surface, this seems to be an easier assumption to make relative to some of the other assumptions needed in asset/liability management modeling (ALM modeling). However, in model validations we have performed, we have […]

October 30, 2015

A Tough Question in a Short Message

Why is it critical to position for quality deposit acquisition, NOW? Because: The competitive environment is complex and changing at lightning speed. Technology companies are redefining banking for just about everyone—not just Millennials. Many credit unions have more than 65% of their deposits with members who are 60 years old or older. Hopefully the traditional […]

October 22, 2015

Observations from ALM Model Validations: NEV – Loans Devalue in Rate Shocks – or Do They?

When considering valuation as a measure of interest rate risk, and value volatility as an indicator of changes in interest rate risk, many institutions perform net economic value (NEV) analysis. When working with credit unions, or performing model validations, a concern many have is ensuring the models have the “right” assumptions. What is the “right” […]

October 15, 2015

Project Management Tip #9: Ideal Mapping

Creating an ideal process map is a critical part of project planning. This process is well worth the effort, as it helps stakeholders to solidify and reach clarity on objectives. For instance, if the credit union is implementing a new loan origination system, the ideal mapping can serve as a guideline for what the project […]

October 8, 2015

Observations from ALM Model Validations: Prepayment Speeds

This blog is a continuation of our series to share observations from A/LM model validations that we’ve performed. Prepayment speed assumptions impact earnings, net worth, and NEV within an A/LM simulation. Too often, though, people may simply expect that their assumptions have been input correctly and are operating as intended. Some of the issues to […]

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