Independent Third Party Reviews
Interest Rate Risk (IRR)
A requirement of the “S”, or “Sensitivity”, component of the CAMELS rating system is for all financial institutions to have independent, third-party reviews of IRR processes and assumptions. FORVIS can provide professional analyses designed to help financial institutions 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 can prepare a report based on those regulatory expectations and industry best practices.
We are 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.
Our clients report confidence from working with a team of professionals who are experienced in ALM modeling and financial management. FORVIS provides ALM consulting and reporting to financial institutions from around the country on a monthly and quarterly basis. Our experience has provided us with insights into what is required in managing IRR for both business planning and regulatory assessments and this knowledge is valued by our clients.
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Liquidity Risk Management
A requirement of the “L”, or “Liquidity”, component of the CAMELS rating system is for financial institutions to have independent, third-party reviews of their liquidity risk management. FORVIS reports provide a detailed approach that can help management identify 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 as well as industry best practices. An institution’s liquidity management process should ensure that its 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:
