WASHINGTON—Just a month after CUToday.info published a series of stories examining the risk of rising rates and competition for deposits at credit unions, the FDIC has also published its Winter issue of Supervisory Insights in which it urges its regulated institutions to look at key aspects of interest rate risk (IRR) management, including the implementation of effective governance processes, the development of key assumptions for analyzing IRR, the development of an in-house independent review of IRR management systems, and what to expect during an IRR review.
"Banks need to be prepared for a period of increasing interest rates," stated Doreen R. Eberley, director, Division of Risk Management Supervision.
Among the guidance the agency has published is "Developing an In-House Independent Review of Interest Rate Risk Management Systems," which describes ways that smaller institutions may be able to effectively and economically perform an in-house IRR independent review.
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