c. myblog

May 1, 2015

Comparison of Interest Rate Risk Methodologies

Interest rate risk was originally viewed as a process that should be done in a back room, resulting in volumes of information that was stored on a shelf to be available when examiners walked in. However, the complexity of the world has changed over time and so must the use of tools to help evaluate […]

April 21, 2015

Draft Response to RBC 2.0

As promised in last week’s blog post, our draft response to RBC 2.0 can be found here. Our main objective in writing this response is to convince NCUA that it would be dangerous for the industry, regardless of the chosen methodology, to add an interest rate risk (IRR) component to the proposed rule. IRR is […]

April 17, 2015

Risk-Based Capital Rule 2.0

Even though the Risk-Based Capital Rule 2.0 (RBC 2.0) has been watered-down, it is not good for the industry. Don’t forget a key component of the RBC 2.0 is NCUA’s consideration of adding a separate interest rate risk (IRR) component to risk-based capital. Standardizing IRR, assumptions, and/or approaches to assumptions, guarantees that the unique risk […]

April 9, 2015

Evaluating Derivatives―Part VI: Why Use Derivatives?

With the derivatives rule that went into effect in 2014, NCUA gave credit unions access to a new tool to help mitigate interest rate risk. Although a derivatives pilot program has been around since 1998, derivatives are still a relatively new thing to the industry. Past blogs in this series have provided the reader with […]

March 26, 2015

The Folly of a Poor Project Management Process

Credit unions are no longer what they were. At one time, they braved a new path in the banking world with the assistance of SEGs, and filled an open need for workers in America. That need is still there but many credit unions have grown from servicing singular employers into servicing entire communities. With that […]

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