By Jeff Johnson, Financial Analyst
The Office of Thrift Supervision (OTS) went away in 2011 and along with it went their published decay rate assumptions used by many ALM models. Many regulators are disallowing the use of OTS data since the NCUA, Fed, and OCC have deemed it to be outdated. NCUA in 2001 also commissioned NERA to propose suggested maturities for credit union deposits but the results, now 10 years old, were never adopted by NCUA.
With the obsolescence of this macro data, credit unions are left on their own as to what assumptions to use when modeling the impact of non maturity shares and deposits (NMS) on interest rate risk (IRR). Among the options are, estimates by management, a cost effective peer deposit index, or conducting a credit union specific NMS study.
Click for the full article.
By Jason Williams, Financial Analyst, Mark H. Smith Inc.
There was some welcome economic news since our last economic update over the summer. United States Gross Domestic Product (GDP) was revised upward again to an estimated 4.6% growth in the second quarter of this year. That puts economic activity at 2.6% above its year ago level. This is coupled with inflation that is estimated at just 1.7% for the second quarter 2014.
The bottom line is that it appears the economy is moving forward and economic activity was stronger in the second quarter 2014 from previous reports.
Click for the full article.
Mark H. Smith, Inc. is conducting a five-question survey about IRR and Liquidity Risk. Please take a moment and submit your answers. Answers are being collected in the aggregate and are not tied individually to responding readers and their credit unions. We will share the results with you in our next issue.
Click to take the survey.
|
Sept./Oct. 2014
View this email online.
Add MarkHSmith.com to your "safe sender" list.
Client Corner: Regulator Sense and Nonsense
By Cynthia R. Walker, COO, Mark H. Smith, Inc.
Here are some of the suggestions, criticisms and requirements that I have heard from regulators in the last 6 months.
Read More
Is ALMPro® Plus Right For You?
This is a more robust IRR and Liquidity Risk solution with enhanced analysis and built-in Dashboard Synopsis. Learn More
Adv.
Contact Us
2860 West 4700 South, Suite D Salt Lake City, UT 84129 Toll-Free: (800) 268-7795 Email us
|