Advisory on Interest Rate Risk Management


When talking to clients, one of the first questions we ask is, "Have you read the FFIEC Advisory on Interest Rate Risk?"  We continue to be surprised by the number of bankers who either have not read it, or skimmed through it once when it was issued in January of 2010.  I can assure you that the regulators will refer to it multiple times during your next exam.  At AMG, this advisory has become our go-to reference guide.  In our opinion, pieces of this advisory are being misinterpreted by field examiners, with suggested techniques being viewed as requirements instead.

For this reason, it is vital that bankers be familiar with the advisory and what is expected of bank management and directors.  Many bankers are shocked at the extent of the expectations when they read it, and even more surprised to find that the vendors they are using are not meeting these expectations.  The onus is on you as managers to make sure your shop is ready for your next exam.

Here is a link to the advisory - keep a copy handy for when you review your next set of reports.