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 […]
/images/White-Logo.png00Charlene Leland/images/White-Logo.pngCharlene Leland2015-02-19 11:45:122021-01-25 15:31:28Evaluating Derivatives―Part IV: The Relationship Between Value and Cash Flow
Many credit union management teams are considering changes to their mobile platform, home banking, loan origination system (LOS) and/or account opening system (AOS). The following are just a few (of many) tips to consider: Get clarity before submitting RFPs. As a leadership team, agree on your decision drivers and the specific business objectives you are […]
/images/White-Logo.png00Charlene Leland/images/White-Logo.pngCharlene Leland2015-02-13 09:09:532021-01-25 15:31:28Considering New Systems? How to Improve Chances for Success
One of the key characteristics of a high-functioning credit union is the ability to make “no” decisions in order to stay focused on the credit union’s strategic direction. As this year starts and the project list grows, it will be important to keep a laser-like focus on the projects that the management team has determined […]
This blog will begin to review the economic value of a swap when testing an instantaneous rate change. This builds on the blog Evaluating Derivatives—Part II: Economic Value. As before, the example swap has the following terms: 7-year term Notional amount: $100 million Credit union pays fixed rate of 2.00% Credit union receives 3-month LIBOR […]
In a previous blog, impact to earnings was discussed as it relates to derivatives and the insurance they can provide against a rising rate environment. While derivatives can be a good option for hedging interest rate risk, especially in today’s low rate environment, it is also important to consider how economic values are determined. Because […]
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Evaluating Derivatives―Part IV: The Relationship Between Value and Cash Flow
Investments and Derivatives Blog PostsOur 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 […]
Considering New Systems? How to Improve Chances for Success
Process Improvement Blog PostsMany credit union management teams are considering changes to their mobile platform, home banking, loan origination system (LOS) and/or account opening system (AOS). The following are just a few (of many) tips to consider: Get clarity before submitting RFPs. As a leadership team, agree on your decision drivers and the specific business objectives you are […]
Making “No” Decisions
Strategic Planning Blog PostsOne of the key characteristics of a high-functioning credit union is the ability to make “no” decisions in order to stay focused on the credit union’s strategic direction. As this year starts and the project list grows, it will be important to keep a laser-like focus on the projects that the management team has determined […]
Evaluating Derivatives―Part III: Economic Value as Rates Change Instantly
Investments and Derivatives Blog PostsThis blog will begin to review the economic value of a swap when testing an instantaneous rate change. This builds on the blog Evaluating Derivatives—Part II: Economic Value. As before, the example swap has the following terms: 7-year term Notional amount: $100 million Credit union pays fixed rate of 2.00% Credit union receives 3-month LIBOR […]
Evaluating Derivatives―Part II: Economic Value
Investments and Derivatives Blog PostsIn a previous blog, impact to earnings was discussed as it relates to derivatives and the insurance they can provide against a rising rate environment. While derivatives can be a good option for hedging interest rate risk, especially in today’s low rate environment, it is also important to consider how economic values are determined. Because […]