June 23, 2021

Balance sheet basics in a changing economy

first_imgInterest rates and fixed costs are rising, liquidity is shrinking, and the U.S. economy is showing signs that it could soon slow down. These factors and others underscore uncertainty in today’s economic climate, which can prove challenging to credit unions. However, organizations that manage their balance sheets to absorb potential shocks are well positioned to report positive performance in any environment.In practice, balance sheet management involves forecasting a credit union’s cash flow and other behaviors for each asset and liability in a variety of scenarios. MJ Coon, chief financial officer of Ent Credit Union($5.6B, Colorado Springs, CO), describes balance sheet management as “planning to ensure the credit union remains safe and sound in any interest rate or economic environment.”For Ent, it looks at how economic changes will affect its net economic value (NEV) ratio and its net interest income. continue reading » ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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