Asset Quality, Earnings, and Capital, Oh My!

Credit Stress Testing | ALM Strategy

How would a recession impact your institution?

Over the past two years, the Fed’s multiple steps to avoid a credit crisis have created “ripples” in the economy – including record-setting deposits, significant inflation, and more – that have resulted in an uncharted risk management situation.

Where are things headed from here? While unemployment has remained low, it is generally a lagging indicator – and more firms across a multitude of industries are starting to point to potential layoffs. Meanwhile, consumer loan delinquencies are quietly ticking up.

All of this raises some important questions: What will the Fed do next with rates? Are we headed for a recession? Trying to foresee the answers is something of a fool’s errand – no one can predict the future. But fortunately for risk managers, accurately predicting the next major economic moves is not