Risk Management & Analytics: Liquidity and your deposits in a rising rate environment

Liquidity and your deposits in a rising rate environment

Interest rates have begun to rise more steadily in the past two years, leaving many to question whether their current deposit strategy is sufficient to improve margins and effectively manage liquidity.

In an upcoming Financial Managers Society (FMS) webinar, experts from MountainView Financial Solutions, a Situs company, will explore deposit behavior under past economic scenarios and identify some of the key trends in banking, policy and depositor behavior that may influence pricing strategies and liquidity risk management. We will also discuss the modeling techniques that will help banks forecast deposit behavior in a way that will inform business strategy and risk strategy as rates keep rising.

MountainView experts Della Zheng and Chris Mills will present the webinar “Liquidity Risk and Your Deposits in a Rising Rate Environment” on October 24, 2018 at 2 p.m. EDT.

We will cover:

  • Historical expectations
  • Economic environment
  • Regional considerations
  • Demographic considerations
  • Policy considerations
  • Modeling techniques

Registration is free for FMS members. Register here.

Federal Reserve at-risk list includes liquidity, cybersecurity

The Federal Reserve System is investing more time and resources into educating bank executives and directors.

While enforcement and supervision are critical parts of its job, efforts are underway to be more transparent and provide better guidance to member banks.

That was the big takeaway from interviews with Julie Stackhouse, managing officer of supervision, credit, community development and learning innovation at the Federal Reserve Bank of St. Louis, and Lisa White, who oversees supervision, regulation and credit at the Federal Reserve Bank of Richmond.

Cybersecurity risk is perhaps the top concern, and the Federal Reserve is putting together educational materials for directors that it hopes to issue early next year. Liquidity risk is another area being emphasized in meetings between bankers and Federal Reserve officials.

The Federal Reserve System is also investing more time educating examiners in areas such as cybersecurity and fintech.

Read more: American Banker

Pentagon, others baffled by CFPB plan to cease military lending exams

The Consumer Financial Protection Bureau’s (CFPB) decision to stop examining financial firms for compliance with the Military Lending Act has sparked pushback not only from lawmakers and consumer advocates but also from the Defense Department and every major group representing military service members.

Acting CFPB Director Mick Mulvaney’s claim that the Dodd-Frank Act does not give the bureau statutory authority to enforce the Military Lending Act is a major reversal from the Obama administration. As reported by several news outlets, Mulvaney has argued further legislation is needed to provide that authority.

But roughly 30 military and veterans groups are opposed to the supervisory rollback. The Department of Defense says it was not consulted on the bureau’s decision and remains committed to the current law, which imposes a 36% annual percentage interest rate cap for active-duty military members and their dependents.

Read more: American Banker

Stock market sell-off could signal turning point for bull market, as Dow plunges again

Bear Market is a term that sends fear into Wall Street and investors. What does it mean? And how does it affect both Wall Street and Main Street?

In a span of six treacherous days on Wall Street, the mood of the stock market turned from giddy optimism to gloomy pessimism.

Pinpointing major shifts in markets is an inexact science. But some Wall Street pros say the current one has reached a turning point, as the low interest rates that powered stocks higher over the last decade give way to higher borrowing costs and heightened risks.

A swift 1,776-point, or 6.6 percent, dive in the Dow Jones industrial average just a week after it hit a record high shows just how edgy and uncertain the investing environment has become.

Read more: USA Today

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