On August 28th, 2017 the FASB issued ASU 2017-12, which significantly expands the risk management toolkit available to Financial Institutions. Todd Cuppia and Eri Panoti will provide a practical guide to implementing the new balance sheet hedging strategies afforded by the updated standard. The new last-of-layer designation significantly increases an institution’s ability to manage the interest rate risk of pre-payable fixed-rate assets, in an accounting friendly framework. This session will focus on both the strategy considerations and financial statement impacts of the new techniques, using real life examples from our clientele. In addition to a deep-dive on the new last-of-layer technique, the session will explore the practical considerations of hedging CDs, non-indexed MMDAs, and the pros and cons of utilizing caps and floors to mitigate interest rate risk.
• Understand the current risk environment for interest rates
• Understand hedging strategies to mitgate interest rate risk