Integrated Risk Management | Leveraging Existing Practices to Drive Community Financial Institution Growth
is cash flows. It’s crucial to understand the importance of cash flows, the different types, their characteristics, and how they perform or act in a forecast. Cash flows are the foundation of ALM modeling and understanding them helps to understand the results when attempting to model interest rate risk through reporting.
Again, this year, the MST survey tallied responses from a wide range of institutions. Participants represent institutions located in, or at least doing business in all 50 states, across mostly all asset sizes.
In this case-study focused paper, we first examine problems with a specific institution’s loss-rate approaches and then construct a defensible projection of lifetime credit loss without meaningful first-party losses or historical loan-level detail.