Board Advises Institutions of Supervisory Expectations for Sound Practices in Managing Interest Rate Risk
The Federal Reserve released an advisory on January 7, 2010 reminding depository institutions of supervisory expectations for sound practices in managing interest rate risk. This advisory, adopted along with the other financial regulators, reiterates the importance of effective corporate governance, policies and procedures, risk measuring and monitoring systems, stress testing, and internal controls related to the interest rate risk exposures of depository institutions. It also clarifies elements of existing guidance and describes interest rate risk-management techniques used by effective risk managers.
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