Without question, the most critical assumption affecting interest rate and liquidity risk is how we treat non-maturity “core deposits”. Assigning .. Read more long-term duration and less volatile pricing creates an internal hedge against rising rates. Through the years, institutions have used many methods to assess the longevity and sensitivity of these funds. These methods include simple regression studies to more robust analysis. How have our newer depositors been similar or different from long-term depositors and what does this mean for your financial institution's plans for product pricing, development and overall growth strategy?. In this session we review the difference between the common core deposit study outputs used for managing interest rate and liquidity risk, from the plans for funding and growing the balance sheet in the future. We will illustrate how critical these assumptions are to the overall risk profile of the financial institution and outline steps to better manage funding in the future.
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