Description
Borrowers are requesting (and getting) lower rates and longer terms than ever before. Can your bank afford to match these kinds of terms? Can it afford not to?
Background
The banking industry continues to swim in excess liquidity, and loan demand in most markets remains weak. Since the banking industry is largely recovered from the financial crisis, these factors have combined to create a wildly competitive lending market.
Bidding wars are erupting for the best credits, and borrowers have noticed. They are now requesting (and getting) lower rates and longer terms than ever before. Can your bank afford to match these kinds of terms? Can it afford not to? And how will you fare under the increased scrutiny of interest rate risk in your next exam?
Agenda
• Identify the basics of an interest rate swap, including the most common structures used in community banks
• Learn why swaps work especially well in this rate environment to combat building interest rate risk
• Recognize how swaps can be used at the balance sheet level for a macro hedge
• Utilize swaps at the loan level to aggressively compete for the best credits without adding undue interest rate risk
• Uncover the core elements of hedge accounting under FAS 133, including the highly beneficial “shortcut method” for effectiveness testing
Benefits
• Determine if swaps might be an appropriate risk management tool in your bank
• Evaluate the pros and cons of off balance sheet hedging as compared to on balance sheet hedging
• The ability to use market data to optimally price fixed rate loans (even if you decide to leave them unhedged)
Who Should Attend
• Lenders
• Financial Officers
• Treasurers
• Controllers
• Risk Officers