Balance Sheet Strategies for Successfully Managing Successfully Managing Through Flattening/Inverted Yield Curve Environment
OL186-18 | On Demand Course | Update | Self-Study
Interest margins are finally improving for many while others are now feeling a tight squeeze as interest rates are rising and the curve is flattening to disturbing levels. For many, danger may be lurking ahead as they have not moved the rates on their deposits yet, however that party is ending quickly. Meanwhile, loan rates are lagging the rise in rates due to competitive pressures; unrealized losses on bonds have resurfaced; EVE risk is rising and regulatory scrutiny is increasing across the board and will likely intensify ahead.
Key variables of concern include overall liquidity levels, the “stickiness of deposits”, price sensitivity of deposits and the potential for disintermediation as rates rise. The big jump in rates is just ahead, learn the traditional and historical tipping point for rates and how to respond accordingly and with confidence?
Recent changes in FASB’s hedging guidance have dramatically increased the attractiveness of derivatives for community financial institutions. These accounting changes have unlocked significant opportunities to explore loan and deposit growth strategies that were difficult to achieve previously. Ignore this game changing benefit at your peril. Real world strategies will be discussed and dissected.
A well prepared and focused Asset/Liability Management Committee has far better odds of balancing current earnings needs with the challenges of the New Rate Cycle and the ever-increasing regulatory demands. Many will hit the “panic” button at precisely the wrong time and take action they will likely regret down the road for long time. Forewarned is Forearmed!
This course was recorded at the 2018 Financial Institutions Conference. Discounted bundle option available here.
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Frank L. Farone
Frank consults nationwide with CEOs and CFOs of financial institutions to increase earnings through the proactive management of capital, liquidity/funding risk, and interest rate risk. He is a frequent speaker and author on topics such as industry issues and trends, funding solutions, regulatory issues, interest rate risk management, capital management and derivatives hedging techniques.
Frank was designated a “top-rated” speaker by FMS and is well known for his popular seminar “Turbo Charging Your ALCO Process” having helped thousands of bankers across the country.
Frank is a graduate of Siena College. He lives in Winchester, Massachusetts and is an avid golfer and runner, having completed numerous marathons including several Boston Marathons over the past 25 years.Back to Instructors