first_img 2SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Dennis Child Dennis Child is a 40 year veteran credit union CEO recently retired. He has been associated with TCT for 25 years. Today, Dennis enjoys providing solutions and training for credit … Web: Details A credit union’s Asset/Liability Management process represents one of the most important functions in its operations.   Paramount to any A/LM process are the Interest Rate Risk (IRR) and equity-at-risk limits recommended by its A/LM Committee and established by its board of directors. Limits are established so a credit union can continually measure to what degree it is placing its balance sheet and profitability at risk in changing rate environments. From those measurements credit union management can create strategies as needed. Setting limits to risk is too important to leave to guess work or simply by using peers’ numbers. Every credit union needs to set its IRR limits by using empirical, statistically-validated processes. Calculating and setting risk limits using empirical methods assures that a credit union is managing and monitoring its exposure to risk according to its unique objectives, equity, operations, and tolerance for risk.Interest Rate Risk, its measurement and management, is a primary concern for regulators. IRR should be considered a primary risk by credit union managers as well. Reviewing important points of what IRR is and how it should be managed is probably appropriate before going further with the discussion on setting IRR limits using empirical methods.Point 1: Managers and boards have responsibilities regarding IRR:A credit union’s board and management needs to be able to answer the following questions affirmatively:Does the credit union use an independently validated IRR measurement process?Do the board and management understand how their A/LM model and process works?Does the credit union apply its A/LM process consistently in its planning and operations?Point 2: IRR is a critical issue for credit unions:IRR is the risk to earnings and capital arising from the movement of interest ratesIRR arises from the differences between the timing of interest rate changes and the timing of cash flowsFor most credit unions, the primary factor driving IRR is long-term loansPoint 3: IRR policies are required by regulation (NCUA Guidance Letter 12-CU-11 August 2012):A credit union’s IRR policy should:Identify who is responsible for review of IRR exposureDirect actions to ensure management measures and controls IRR exposureState the frequency of IRR monitoring and measurement of IRR to the boardSet risk limits for IRR exposure based on a selected measurement toolChoose tests such as rate shocks that a credit union will perform using selected methodsProvide for review of changes in IRR exposure and compliance with policy and risk limit.Provide for assessment of IRR impact on business activityProvide for annual review of policy to ensure it is commensurate to risk profilesWhen appropriate, set limits for individual portfolios, activities, etc.A credit union’s limits to risk exposure are an integral part of its IRR policy. These policy limits should reflect the actual conditions uniquely inherent to a credit union’s interest margin, equity and appetite for risk.   For these reasons, using empirical methods to set IRR limits are important.Setting IRR limits using empirical methods is no easy process. A credit union may be best served by relying on the expertise of a consulting firm specializing in such matters. Such a firm should be able to show that it has invested in studies and data gathering sufficient to have developed statistically reliable modeling processes. The firm should also be able to explain to the satisfaction of managers and regulators the components of its models and how these models have been statistically validated. When considering outsourcing the task of establishing IRR limits, credit union managers probably are best served by a firm that requires a minimum of data input from credit union staff. Most firms can load much of the information they need from NCUA 5300 forms.A firm hired to provide IRR limit recommendations should be able to present at a minimum:The recommended Net Interest Income to be placed at riskThe recommended equity to be placed at riskThe recommended minimum equity ratioThe methodology and statistical testing used to arrive at its recommendationsCredit unions are in the risk management business. Effectively managing risk requires setting limits. IRR limits are critical in any financial institution’s A/LM process. Setting these limits using empirical methods that are statistically validated on a regular basis helps assure regulators that a credit union’s board and management are “on top of the game” when it comes to IRR management. More importantly, measuring and monitoring IRR against stochastically derived limits provides credit union management a meaningful method for assuring regulators they are planning and making adjustments in their balance sheets as risk conditions fluctuate. Managing IRR appropriately also assures that the credit union is in a position to take advantage of profitable opportunities when changes in interest rates present such opportunities.last_img read more

first_img continue reading » Online banking is a wonderful time-saver, but even logging into your banking app on your phone over and over again can feel like a hassle. For the real hands-free banking experience, use your Amazon Echo ($100 at Crutchfield) to check your bank account balance, transfer money and get a handle on your recent transactions.Linking your Echo to your account is quick and private. Don’t worry, you’re not sharing your personal banking info with Amazon when you connect it to the Alexaapp. Just make sure you feel comfortable with the people who might be within earshot when Alexa responds.Unfortunately, the list of banks that are compatible with Alexa right now is pretty slim, but you can connect your bank account to PayPal and use it to make payments.Here’s how to get started. ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img read more

first_img RECORD STAND BASSETERRE, St Kitts (CMC): Spin twins Damion Jacobs and Nikita Miller shared eight wickets to follow up powerful batting that concluded with a third first-class hundred for Devon Thomas and spur Jamaica Scorpions to an innings and 73-run victory over Leeward Islands Hurricanes in the WICB Regional 4-Day Tournament on Saturday. Jacobs grabbed 5-64 from 18 overs to end with match figures of 10 for 167, and Miller collected 3-44 as the Hurricanes, trailing by 307 on first innings, were bowled out for 234 in their second innings about an hour past the scheduled close on the rain-marred third day of the day/night, fifth-round match at Warner Park. Left-hander Chesney Hughes was the mainstay of the batting for the Hurricanes with 54 wicketkeeper/batsman Jahmar Hamilton supported with 45; left-handed opener Kieran Powell, the Hurricanes captain and former West Indies opener, made 40; veteran all-rounder Tonito Willett added 27; and Kacey Carty, a member of this year’s West Indies Under-19 World Cup winning squad, got 23. The result meant that the Scorpions bagged a whopping 21 points from the match, moving them to a total of 67.8 and extending their lead at the top of the standings. Hurricanes ended with 3.8 and now have 40.4. The Antigua-born Thomas, a former Hurricanes captain, became the second century-maker for the Scorpions, finishing unbeaten on 114, to follow Brandon King, who was dismissed earlier in the day for 194 as the visitors piled up 550 for seven declared. King struck 17 fours and 13 sixes in a memorable maiden first-class hundred that lasted 218 balls in 288 minutes. Thomas struck 14 fours and one six from 227 balls in a shade over five hours of batting and anchored the rest of the innings following his record stand of 309 for the fifth wicket with King before the declaration came about 40 minutes before the dinner break. Powell gave the Hurricanes a frenetic start, smashing eight fours and one six from 17 balls in a 15-minute stay at the crease before he was caught at cover off Reynard Leveridge. The Hurricanes reached 53 for one at dinner and were 77 for two, having lost opener Montcin Hodge caught at first slip off Marquino Mindley when rain drove the players off the ground on resumption. An early tea break was taken following the lengthy rain delay, and the Hurricanes offered token resistance only when play was resumed. Carty added 46 with Hughes for the third wicket before he became the first of Jacobs’ scalps when he was bowled swinging wildly at a well-tossed-up delivery from the leg-spinner. Hughes then shared 62 in the biggest stand of the innings for the fourth wicket with the in-form Hamilton, defying two, rain interruptions to reach his 50 from 138 balls before he dragged a delivery from Miller to mid-wicket, leaving the Hurricanes 174 for four. The home team reached 200 without further incident, but Jacobs bowled Hamilton off the inside edge and triggered a collapse that saw five wickets fall for six runs in the space of 63 deliveries before Miller trapped Willett lbw to bring the curtain down. Earlier, the Scorpions, resuming the day on 461 for four, continued to plunder the depleted Hurricanes attack, which had lost the services of Cornwall the previous day and was now further hampered by a sore shoulder that sidelined Gavin Tonge.last_img read more