c. myblog

August 27, 2015

Model Risk Management

Model risk involves the use of financial models, and the potential that errors in setup, input, or interpretation of results can lead to material misstatement of results. Model risk can be present in internally created financial models or in vendor-supplied financial models and/or results. Having a model’s mathematics validated periodically (important only if there is […]

August 14, 2015

What Are Some Things to Consider as Part of the Budget Process?

We help a lot of institutions with the creation of their budgets and long-term forecasts. There are many questions that often arise as part of that process. The most common question is, what rate environment should I plan on? There is no easy answer to this question; the reality is that whichever environment gets incorporated […]

August 6, 2015

Forward Curve Back Testing

Our last blog, NEV Does Not Equal NII, drew questions from some of our readers. Specifically, some questioned our comment about a forward curve’s inability to predict interest rates. This is fair, since some in the industry seem to treat it as a foregone conclusion that a forward curve will come true. We hear a […]

July 30, 2015

NEV Does Not Equal NII

Some in the industry say that net economic value (NEV) is an indicator of future earnings. Let’s test this out by modeling a credit union taking $30 million of funds that are currently sitting in overnights earning 0.25% and investing them in mortgage-backed securities earning 1.75%. Even without a model, we know that net interest […]

July 23, 2015

Is Your Battlefield Changing Like Blockbuster’s Changed?

In 2004, with $5.9 billion in revenue and 9,000 stores, Blockbuster enjoyed a dominant position in its market.  In the evenings and on weekends, their stores were busy with people eager to review the latest titles and select their entertainment for the evening.  However, by 2013, Blockbuster was down to just 300 stores earning $120 […]

Start typing and press Enter to search