WASHINGTON The Federal Deposit Insurance Corp. has added to its collection of banker training videos with an online series devoted to interest rate risk.
The eight-video module, announced Tuesday, is part of a broader effort by the agency to provide community bank managers and board members with easy access to technical training. The training initiative was first unveiled in April with a series of online videos providing basic instruction on banking concepts to new board directors.
But the latest installment on interest rate risk, meant for those overseeing a bank's asset-liability management, focuses on a potential trouble spot in the industry that has worried regulators. Banks' access to cheap liquidity during the extended period of low interest rates is driving concerns that institutions may not be prepared as rates normalize.
"We have heard at various outreach events that interest rate risk is a growing concern for community bankers. We share that concern here at the FDIC," Daniel Frye, an area director in the FDIC's Boston office, said in the opening video of the module.
The new series lasts over an hour total and is narrated by supervisory examiners from the agency. Topics discussed include the different types of interest rate risk, the types of models banks can use to measure their exposure to interest rate risk, the effects of rate changes, how deposit behavior can affect interest rate risk, and establishing internal controls over a bank's interest rate risk management. (The video series was posted on the FDIC's web site and the agency's YouTube channel.)
Since the April release of the agency's first set of training videos, the FDIC has posted six more for bank directors and is expected to add five additional videos as part of its third installment. The technical assistance topics expected to be added include fair lending, appraisals, troubled debt restructurings, evaluating municipal securities and flood insurance coverage.