Interactive Planning Systems, a provider of PC-based financial accounting and analytical programs, is releasing an upgraded version of its asset-liability budget management system to help banks manage interest rate risk.
Specifically, the program helps banks to meet the reporting requirements of FDICIA 305, the interest rate risk component of capital regulations.
The program enables managers to measure changes in interest rates on a bank's capital position, which helps, them to predict Federal Deposit Insurance Corp. insurance premiums more accurately, said IPS officials.
"In the past, regulators have insisted that financial officers focus on interest rate risk as a key indicator of an institution's soundness," said Jerry Weiner, Interactive Planning's chief executive officer. "With the enactment of FDICIA 305, financial officers will not only have to consider rate risk, but also capital levels and asset-liability profiles."
Mr. Weiner said that the upgraded program, called Album 3.5 will simplify this process.
The program uses specific codes for interest rate risk, credit risk, and capital that are assigned to each balance sheet account by the institution. Managers can categorize each account on the basis of required evaluation classifications. A built-in selection capability automatically produces FDICIA 305 reports in the appropriate formats for either banks or thrifts, Interactive Planning says.
The program also is aid to provide the institution with precise information, based on code assignments, in the format specified by FDICIA 305. Once classification is complete, the program produces a number of reports, including an interest rate sensitivity analysis, and asset reports.
An advantage of the program, said Mr. Weiner, is that it allows banks to use a common data base to meet reporting requirements and do planning and budgeting. In addition, the program interfaces to major third-party data processors, such as Fiserv Inc., Electronic Data Systems Corp., and M&I Data Services Inc., enabling banks to easily transfer data into the program, he said.
IPS, based in Atlanta, modified its existing Album program, which has over 10 years of operating history, to produce the new version. The existing system is currently used by more than 500 banks, thrifts, and credit unions nationwide.