By evaluating your credit union’s share sensitivity, you can measure how quickly members’ non-maturing deposits have historically responded to changes in dividend and market rates. Study how these changes affect member deposit balances and create reasonable assumptions for future disintermediation. Use the data as assumptions for your ALM risk modeling. Armed with this information, you can mitigate the impact of these dynamics on your credit union’s balance sheet, and be confident in your decision-making
Estimate share balance and rate changes in various rate environments to enhance readiness and avert negative balance sheet impacts. Regulators encourage this type of analysis to enhance ALM modeling assumption efforts and results.
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