This presentation looked at the role of scenario analysis in Asset Liability Management (ALM) for credit unions. We dived into practical applications, best practices, and regulatory considerations to help viewers confidently navigate financial uncertainties and optimize balance sheet performance.
TAKEAWAYS:
- We discussed the different types of scenarios such as baseline scenarios, stress scenarios, and growth scenarios. This discussion included the data and assumptions in each model.
- What type of factors can we run scenario analysis on? In this session we looked at interest rate scenarios, credit risk scenarios, and liquidity scenarios.
- Lastly, we looked at regulatory considerations and best practices surrounding Model validations, documentation, and enterprise risk management integration.
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