c. myblog

March 15, 2017

Investment Strategy: Consider Income Volatility vs. Yield

Increase in loan-to-asset ratios along with the potential for higher market interest rates and tighter liquidity heighten the importance of the investment strategy and its role in supporting a credit union’s overall business strategy. Understanding income volatility versus yield can be valuable in establishing investment strategy. Below we are illustrating the point using two investment […]

March 9, 2017

Interest Rate Risk Policy Limits: One Big Misconception

We initially published the blog below on January 28, 2016.  With interest rates having increased recently – and more increases seemingly on the horizon – we thought this a good topic to revisit as it has been coming up in model validations we complete. We often see interest rate risk policy limits that rely too […]

February 23, 2017

Don’t Just Focus On Interest Rate Risk – Yield Matters

While interest rates have been fluctuating over the last few months, some feel rates will consistently begin to move up based on indications from the Fed. But what if they don’t? As you discuss your earnings and interest rate risk, it is important to not just look at the risk. Credit unions should pull it […]

February 15, 2017

Too Much Loan Growth?

Many credit unions have had the good problem of being so successful in lending that liquidity has become a challenge.  A blog we wrote in December 2016 identified 6 key questions that decision-makers should evaluate on the issue.  This post expands on that topic by looking at several possible liquidity solutions credit unions are considering […]

February 9, 2017

Derivatives – Another Option For Helping Mitigate Interest Rate Risk

The Federal Reserve signaled their expectation to continue Fed Funds rate increases in 2017, but substantial uncertainty remains about when and where market rates will move.  Credit unions can find it challenging to achieve a desirable ROA today while maintaining an acceptable level of risk should market rates increase.  Decision-makers have a variety of options […]

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