Risk Management Webinar: Risk Management in a Flat-to-Inverted Yield Curve Scenario
Monday, May 1, 2006
This event, co-hosted by the National Community Investment Fund and the Federal Deposit Insurance Corporation, featured a discussion of recent FDIC research on the yield curve and a banker-led discussion of risk management strategies employed during flat or inverted yield curve scenarios.
Presentation: Risk Management Webinar: Risk Management in a Flat-to-Inverted Yield Curve Scenario
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install Windows Media Player.
Transcript: Risk Management Webinar: Risk Management in a Flat-to-Inverted
Yield Curve Scenario
For recent FDIC research on the yield curve, see the February 22, 2006, issue of FYI: "What the Yield Curve Does (and Doesn't) Tell Us," at http://www.fdic.gov/bank/analytical/fyi/2006/022206fyi.html.
Partners and Presenters
Norm Williams, Chief, Economic Analysis, and Ross Waldrop, Senior Financial Analyst, Federal Deposit Insurance Corporation, discussed research done by the FDIC on the current interest rate environment focusing on:
Theoretical background on interest rates and yield curve dynamics; relationship to economic activity.
What influences the yield curve's shape, and why does it sometimes invert? A look at recent trends.
Historical perspectives on flat yield curve impacts on the banking sector:
Margin compression and implications for asset liability management.
Liquidity risk and implications for managing cash flows.
Credit risk and implications on portfolio construction and loan mix.
Paul Hudson, President and CEO, Broadway Federal Savings Bank, Los Angeles, gave a presentation on interest rate management as it related to pricing of loans and deposits, which led to successful outcomes for the CDBI.
David Oser, Senior Vice President, ShoreBank Chicago, discussed strategies to manage interest rate risk in the bond portfolio and for asset liability management.
Saurabh Narain, Chief Fund Advisor, National Community Investment Fund, Chicago, provided some examples of successful (and not so successful) strategies in the above context.