Archive

Go to:

August 2017
SMTWTFS
12345
6789101112
13141516171819
20212223242526
2728293031
< Jul Sep >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

Technical Bulletin on GAP Mechanics available from ALM Resources
Thursday, February 4, 2016 6:55 AM

Dr. Charles Idol has released a technical bulletin titled “GAP Mechanics: Rate Sensitivity Factors on Non-Term Share Accounts” discussing how to determine RSFs on non-term share accounts in +/- 100bp GAP calculations. This bulletin was developed in response to credit union and examiner questions regarding treatment of non-term share accounts in an interest rate risk profile.

GAP measures a credit union’s short-term interest rate risk and the volatility of spread to up or down shifts in interest rates over the next six months. With interest rates at historic lows, members transferred CD money into non-term share accounts to avoid locking up funds at very low rates of return. As the CD money moved, the average balances of shares, drafts, and money market accounts increased. As the market rises, credit unions will see some of these funds shift back to CDs. This runoff is 100 percent rate sensitive. RSFs on non-term share accounts will increase as a result.

For a more information on this process, visit the ALM section of our website and view Dr. Idol’s technical paper in its entirety.