How Good are your ALM Assumptions?
ALM model assumptions are an attempt to foresee the future behavior of our assets and liabilities as future interest rates increase or decrease.
The assumptions we choose are important because they will ultimately drive credit union decisions. They are challenging at best since we are not equipped with a crystal ball.
Adding to that challenge is the fact that members’ behavior is sometimes based more on emotion than financial expertise.
THIS WEBINAR WILL EXPLORE:
- The quality of the common methods that credit unions utilize in arriving at the deposit and prepayment assumption to use in their ALM models
- Common mistakes in choosing assumptions
- Common sense tests for evaluating the effectiveness of assumptions
- Internal controls over the implementation of assumptions
- The consequences of underestimating interest rate risk