By CYNTHIA R. WALKER - ceo
Beta and the rate sensitivities of deposits  is a hot topic when talking interest rate risk. Understanding your deposits and predicting their behavior and rate sensitivities (beta), along with anticipating how the credit union board and management may respond to changing interest rates is essential to estimating, monitoring, and managing interest rate risk. An important part of any interest rate risk program is knowing the beta, lag, and decay rate of the funding sources. This article will focus on the beta and lag trends for non-maturity deposits and how they are affecting net interest income.
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By MARK H. SMITH STAFF
Credit union managers are faced with a myriad of  risk management decisions every day. These decisions have consequences, many of which can affect return on assets and the overall health and safety of the credit union. When managers assess the many risk factors, they also need to determine a course of action that is appropriate based on those assessments. The answers to the following questions can steer the action:
- What are the potential costs and benefits of the action?
- What is the potential magnitude of error if the outcome is not as expected?
- What is the risk or opportunity loss of doing nothing?
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By MARK H. SMITH STAFF
Do you feel like you’ve just gotten used to rates  increasing from their historic lows and now talk of rates declining is making your head spin a little? Yes, rates may be declining sooner than expected. Although no one can predict rate changes with any certainty, the increasing probability should be moving the topic of declining rates higher up on the agenda at your board and ALCO meetings.
The position of the Feds, the fed funds futures market, and the spread between the 3-month Treasury bill and the 10-year Treasury note all point to an increased probability of the Feds reducing rates, and it could happen sooner than you might think, maybe even as early as Sept 2019.
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Spring edition 2019
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