Regulatory Alerts2003-01-13
OFI Bulletin 01-2003 Asset/Liability Models
The Louisiana Office of Financial Institutions requires financial institutions to periodically validate their asset/liability models to accurately measure interest rate risk amid historically low and potentially rising rates. This mandate ensures independent, at-least-annual reviews confirm that model forecasts reasonably estimate actual earnings performance and allow for timely adjustments to reduce unacceptable variances. Accurate, board-level reporting from these validated systems supports sound financial decision-making and prevents common examination deficiencies, particularly when the function is outsourced.
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