Risk is the potential that events, expected or unanticipated, may have an adverse effect on the credit union’s net worth and earnings. The seven categories of risk for credit union supervision purposes are Credit, Interest Rate, Liquidity, Transaction, Compliance, Strategic, and Reputation. Any product or service may expose the credit union to multiple risks; these categories are not mutually exclusive.

Three primary FDIC examination goals when auditing for Sensitivity risk

Submitted by sevans on Tue, 02/10/2015 - 3:55pm

FDIC examination procedures follow a risk-focused framework that incorporates the Policy Statement's guidelines and efficiently allocates examination resources. Examination scope will vary depending upon each bank's interest rate risk exposure relative to earnings and capital, and related strength of risk management processes. This section of the Manual is intended to provide a thorough background on the interest rate risk management process and examination guidance related to it. It is not an exhaustive study of IRR measurement methods.

This guidance is divided into eight sections addressing Sensitivity risk

Submitted by sevans on Tue, 02/10/2015 - 3:52pm

This guidance is divided into the following additional sections:

  • Examination Standards and Goals,
  • Types of Interest Rate Risk,
  • Management Responsibilities for IRR,
  • IRR Measurement Methods,
  • IRR Measurement System Review,
  • Variance Analysis,
  • Other Market Risk Factors,
  • Rating Sensitivity to Market Risk, and

Market Risk Glossary.