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Asset Liability Model Validation

Asset liability (A-L) model validation is an essential component to credit union risk management and reporting. It is an evaluation process in which every aspect of a credit union’s A-L model is compared against current methodology, described as “best practices.” The information gained from validation helps credit unions determine if their A-L process is adequately capturing the full measure of IRR of the balance sheet. If true risk is not measured against an appropriate model, decision-making regarding risk will suffer, as will performance.

A-L model validation assures credit union CEOs, CFOs, asset liability committee (ALCO) members, and other credit union leaders that the IRR measurement process accurately displays the IRR exposure of their credit union. It enables them to identify where investment IRR measurements may not fully capture true risk. These areas include modeling assumptions, account set-up, and reporting practices. In addition, validation ensures compliance with NCUA and other financial institution regulations.

How Will QuantyPhi Help Your Credit Union?

QuantyPhi’s goal is to help you evaluate the interest rate risk (IRR) on your balance sheet and provide you insights on how to improve your credit union’s performance and pass your exams with ease and confidence.

QuantyPhi’s asset liability experts will review critical areas of IRR measurement and management including:

  1. Impartial and unbiased data
  2. Subjective assumptions data
  3. Balance sheet risk and appropriateness of modeling focus
  4. ALCO and board reporting
  5. Separation of duties
  6. Current IRR policy 

By using powerful state-of-the-art technology, our highly-trained analysts will review your credit union’s IRR process, pinpoint areas that are not currently optimized for overall peak performance, suggest methods and practices to help improve your credit union’s asset liability management process, and help you implement any desired changes.

QuantyPhi
6262 South Lowell Place, Muskego, WI 53150
Phone: (414) 433-0176 | Fax: (414) 427-3700
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