c. myblog

March 20, 2015

Thinking of Growing Your Loan Staff? Think Again

GOOD NEWS: Loan volume is up. BAD NEWS: Your lending manager is saying, “We need to hire more people!” Also, the current staff is working overtime. GOOD NEWS: You may not have to add staff and you may not need to pay overtime. Before you decide to add staff, step back and answer these questions: […]

March 13, 2015

Voice your concerns NOW about NCUA’s consideration of adding a separate IRR component to RBC

If RBC 2.0 passes as written, each credit union defined as complex will be required to quantify their unique risks and maintain adequate capital to back those risks, all of which is to be supported by a written strategy. Excerpt from proposed RBC 2.0, §702.101 (b) Capital Adequacy: “(1) Notwithstanding the minimum requirements in this […]

March 5, 2015

Evaluating Derivatives―Part V: Economic Value Declines Over Time

Credit unions purchase derivatives to receive value: interest rate risk protection. This blog series set out to help decision makers understand the variety of outcomes they could observe over the life of a derivative, and how those outcomes will ultimately determine the value realized. Over its life, derivative economic value is impacted by two forces: […]

February 27, 2015

Capital Planning and Stress Testing

As the first round of NCUA supervisory stress tests are being completed, NCUA’s capital planning and stress testing rule for the largest credit unions might have you asking if you should be doing capital planning and stress testing too. Even if you are not a federally insured credit union with assets of $10 billion or […]

February 19, 2015

Evaluating Derivatives―Part IV: The Relationship Between Value and Cash Flow

Our last post on derivatives explored the relationship between rate shocks and changes in value. Inherent to this was a caution that improvement in value due to changes in the implied path of interest rates doesn’t guarantee cash flows will be positive in the future. The economic value analysis is typically limited to assuming an […]

Start typing and press Enter to search