The single most important set of assumptions you load into your asset-liability model is the decay rate and pricing beta assumptions for your core deposits. For over 30 years, the industry has relied on the Office of Thrift Supervision as the primary source of industry assumptions for core deposits. OTS assumptions are the default set of assumptions for most asset-liability model vendors and most outsource services. This is true whether… Continue reading
As someone who spent over 20 years working with banks and credit unions resolving funding issues, I watched the FDIC’s Roundtable on Brokered Deposits this spring with much anticipation; we have all known for years that the definition of core deposits needed updating… READ MORE Continue reading
Tool 1 of the ABA Liquidity Toolbox focuses on capital planning. As a companion to Tool 1, we developed a capital planning model. It takes your capital goal as an input.
So how do you come up with the number to drop into the capital goal cell of the our capital worksheet. Most of us start out with the core capital minimum for well capitalized status. Let’s say we
FREE XSPEAK WEBINAR SERIES
Title: Planning with your A/L model to meet Strategic Goals
When: October 8, 2010 —- 10:30-11:45 Central
The changing landscape continues to pressure ALCO teams to make better use of their tools for real decision making, not just regulatory compliance. Continue reading
A web site is not just some code on some server somewhere, it’s an entire branch that has responsibilities and requires skills that are unique and not all that easy to pick up through experience. Experience that you may not have or may not be present in your technical staff or web host. Continue reading
We are in a time period of tremendous changes in our regulatory, competitive, legislative and economic environment. Regulatory initiatives must feel like a blizzard. In the past year there have been significant regulatory initiatives in interest rate risk and liquidity risk. Upcoming is financial reform which will alter how we interact with our customers, alter how we produce our income, and alter how much capital we will need to carry in order for regulators to consider us to be well capitalized. Continue reading
I think nearly everyone realizes that the industry has not effectively priced loans to cover credit risk. A long period of economic expansion along with the practice of basing reserves on fairly recent loss experience caused the industry to be under-reserved for the losses experienced since 2008. We are likely to see a regulatory agency initiated changes in reserve coverage requirements that force us to consider losses in both good and bad times in setting reserves for loan losses in the future. Continue reading
This week the NCUA, FDIC, Federal Reserve, OCC and OTS released the “Interagency Policy Statement on Funding and Liquidity Risk Management.” This is the final form (for now) of the “Proposed Interagency guidance on Liquidity and Funds Management” released for comments on July 6, 2009.
March 23, 2010 @ 2:00 Central is our FREE FARIN XSpeak Webinar titled : Five Steps to an Effective Liquidity Management Program. I plan limit my allocation of time spent on the “what to dos” to about 1/3 of the presentation. I’ll devote 1/3 to the Basel document as it defines many of the “hows” that are likely to be incorporated into the final “final” document. Then I’ll spend the last 1/3 of the session making recommendations on the approach you might take right now.
I hope to see you there! Continue reading
As you are probably aware, the Proposed Inter-agency Guidance on Liquidity and Funds Management was released on July 6. We’ve been told that the final version is likely to be released late first quarter or early second quarter 2010 with only minor changes. The guidance document raises the bar on liquidity risk measurement and management by a considerable amount. For the most part it tells you what to do, but not how to do it. Continue reading
A landing page is an entry point to a web site that draws in traffic from a search engine, convinces the visitor they want the product and then helps them to start the process to get it. To be effective, a landing page needs the following elements. . . Continue reading
