Independent Third Party Reviews
Interest Rate Risk (IRR)
A requirement of the “S” component of the CAMELS rating system is for all financial institutions to have independent, third-party reviews of IRR processes and assumptions. ProBank Austin provides institutions with expert analyses designed to help improve their IRR processes. As an outsourced provider of IRR reporting and consulting services, our staff is well-versed in what examiners expect and we prepare a comprehensive report based on regulatory expectations and industry best practices.
We are industry leaders noted for developing solutions for verifying ALM models that meet the highest level of industry standards. Our model assessments comply with specific OCC 2000-2016 mandates, the IRR Advisory issued by the FFIEC in January 2010, and other crucial requirements.
We deliver a high degree of confidence to our clients that can only be achieved by working with a team of experts who are experienced in ALM modeling and financial management. ProBank Austin provides ALM consulting and reporting to financial institutions from around the country on a monthly and quarterly basis. The depth of our experience has provided us with essential insights as to what is required in managing IRR for both business planning and regulatory assessments and this knowledge is highly valued by our clients.
Liquidity Risk Management
A requirement of the “L” component of the CAMELS rating system is for financial institutions to have independent, third-party reviews of their liquidity risk management. ProBank Austin reports provide a comprehensive review that will assess the extent to which an institution’s liquidity risk management complies with the Interagency Policy Statement on Funding and Liquidity Risk Management adopted in April 2010 and to sound industry practices. An institution’s liquidity management process should ensure that daily funding needs are met and provide coverage for both expected and unexpected deviations from normal operations. Accordingly, an institution should have a comprehensive management process for identifying, measuring, monitoring, and controlling liquidity risk.
We have identified seven critical elements of sound liquidity risk management and we provide objective assessments of each area. Key elements to be examined in our analysis include:
- Effective corporate governance
- Appropriate policies, procedures, strategies, and limits
- Liquidity risk measurement, monitoring, and reporting
- Diverse mix of existing and potential funding sources
- Adequate levels of highly-liquid marketable securities
- Comprehensive contingency funding plan (CFP)
- Internal controls