c. myblog

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 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 […]

January 26, 2017

Interest Rate Risk Management: Timing of Earnings Matters

Would it surprise you that some interest rate risk mitigation strategies actually add risk for a period of time?  In the end, these strategies may be effective at mitigating interest rate risk but it may take years for the effectiveness to be felt.  The challenge is that many methods used to test mitigation options, like […]

January 5, 2017

Some Things to Consider About a Rising Rate Environment

The Federal Reserve increased the federal funds target rate to a range of 50-75 bps at its mid-December meeting.  In its forecast (the “dot plot” shown below), the Fed indicates further tightening in 2017. While credit unions have certainly lived through rising rate environments in the past, few have managed a credit union through a […]

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