7 Class Hours

Instructor: Brad Olson

In this class, students review how banks identify, measure, monitor, and control Interest Rate Risk (IRR). Class discussion will center around IRR modeling and current regulatory expectations. Participants will also consider what current banking and economic trends influence the way IRR is modeled and measured. What specific challenges does the current real-world rate environment present?
What are the different types of IRR and how do they behave in different scenarios? How are these behaviors captured and evaluated? The class will explore measurement of both short-term IRR (aka Earnings-at-risk) and long-term IRR (aka EVE-at-risk.)

Key Takeaways/Learning Objectives

• Confidently identify different types of IRR and where they exist on a bank’s balance sheet.
• Recognize the strengths and weaknesses of contemporary IRR measurement techniques
• Understand what IRR stress-tests can (and cannot) tell you about bank performance.
• Explore strategies for monitoring and minimizing a bank’s IRR.

 

Annual School Session 

First Year Core Course

Competency: Financial Management & Strategy