by Todd Taylor, Taylor Advisors
| As financial institutions across the nation cope with market and economic challenges created by COVID-19, anticipating next steps to manage balance sheet "risks" AND improve or protect profitability is becoming increasingly more difficult. Below are excerpts from Taylor Advisors' four-part Pandemic Mini-Series. Please click the corresponding hyperlinks below to read the eBriefs associated with the four ALCO positions of liquidity, capital, investments, and interest rate risk. |  |
In Part 1 of our mini-series, we discussed the importance of robust liquidity stress testing, a comprehensive contingency funding plan, and anticipating potential changes in loan and deposit portfolios.
In Part 2, we discussed potential impact on capital from asset quality deterioration, margin compression, and other balance sheet changes.
In Part 3, we discussed investment strategies, as portfolios and cash usually make a meaningful contribution to institution's overall interest income.
In Part 4, we turn our attention to interest rate risk management and look at challenges relating to exposures to falling/low rates. Many financial institutions are beginning to feel pressure on interest income and earning asset yields, frequently compounded by funding costs already at historically low levels.
We hope the topics covered will benefit you and your clients as you progress through these unprecedented times.
If you have questions, contact your IZALE Financial Representative. 855-492-5334
In Part 2, we discussed potential impact on capital from asset quality deterioration, margin compression, and other balance sheet changes.
In Part 3, we discussed investment strategies, as portfolios and cash usually make a meaningful contribution to institution's overall interest income.
In Part 4, we turn our attention to interest rate risk management and look at challenges relating to exposures to falling/low rates. Many financial institutions are beginning to feel pressure on interest income and earning asset yields, frequently compounded by funding costs already at historically low levels.
We hope the topics covered will benefit you and your clients as you progress through these unprecedented times.
If you have questions, contact your IZALE Financial Representative. 855-492-5334
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