Search: "interest rate risk"

For Your Radar: Proposed FASB Update On Liquidity And IRR

From now until September 25, the Financial Accounting Standards Board (FASB) has a Proposed Standards Update open for comment regarding liquidity risk and interest rate risk. The proposed interest rate risk disclosures, if passed, would provide dangerous and misleading information about the safety and soundness of a financial institution, and therefore, the financial services industry. […]

Strategic Plans And Quantifying Risk

In the recently issued Interest Rate Risk Questionnaire, the NCUA devoted an entire section to evaluating if decision-making is informed by interest rate risk measurement systems.  The guidance specifically references interest rate risk “what-if” testing in conjunction with strategic plans and operational decisions—and that “what-if” analysis outcomes should be documented within the strategic plan to […]

Excerpt: The New IRR Rule – Be Prepared

The National Credit Union Administration recently issued its final rule requiring “federally insured credit unions to develop and adopt a written policy on interest rate risk management and a program to effectively implement that policy, as part of their asset liability management responsibilities.  The interest rate risk policy and implementation program will be among the […]

Operational Efficiency—Improving Earnings And Member Experiences While Driving Increases In Net Worth Dollars

In comments surrounding the new rule on Interest Rate Risk, the NCUA states that, “net worth is the best measure against which to gauge a credit union’s risk exposure.”  As credit unions are looking to improve earnings and grow net worth dollars in this historically low interest rate environment, yield on assets and cost of […]

c. notes Excerpt: Thriving In A World of Shrinking Margins

As interest rates have been at historic lows for a prolonged period of time, credit unions have had the benefit of lowering their cost of funds (COF) as loan and investment yields decline.  Many seem to have worked through their credit issues and, at least for now, have been able to reduce their provision for […]

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