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Liquidity Stress Testing

Pressing current loan, investment and deposit cash flows to see how a credit union is affected by changes in anticipated behavior is a basic form of stress testing. Identifying current cash flows and potential changes in anticipated timing and price of these cash flows are the focus of this service. Strong balance sheet management always has an eye on the liquidity position of the credit union. Understanding potential stresses from lack of funding for operations, loans, or higher cost funding is essential to proper management.

How Will QuantyPhi Help Your Credit Union?

To better see exposures, and adjust exposure before it becomes loss, it is important to follow proper liquidity management techniques. QuantyPhi studies how to analyze and manage current and future liquidity situations and the relevant pricing of liquidity in stressed situations.

What are the benefits of Stress Testing?

Stress testing allows CEOs, CFOs, regulators, and other credit union leaders better understand their credit union’s risk exposure to changes in the cash flows in the short and long-term time horizon. This enables them to identify and act upon performance opportunities and potential risk threats. Discovering the cash flow sensitivity and the funding costs that may change in an increasing rate environment helps managers plan the balance sheet strategy more effectively.