News Column

NCUA Economic Video Shows Interest Rate Risk Lurking Behind Investment Trends

December 20, 2013

ALEXANDRIA, Va. , Dec. 20 -- The National Credit Union Administration issued the following news release: Fourth-quarter economic trends show positive signs of a stronger economy, but expected changes in the interest rate environment will present challenges to future credit union performance, according to a new economic video analysis released today by the National Credit Union Administration . The latest video in the agency's Economic Update YouTube series is available at, . In the December update, NCUA's Chief Economist John Worth examines how credit unions can benefit from the recent improvements in the economy. "The improving economy is a positive sign for credit unions and their members," Worth says. "Falling unemployment and improving consumer balance sheets are likely to help boost membership rolls, increase loan demand and improve loan quality." However, Worth warns credit unions to be vigilant regarding interest rate risk. He highlights evidence that credit unions are increasingly reaching for yield by lengthening the maturity structure of their investment portfolios. In a rapidly changing interest rate environment, this strategy can boost earnings today but result in significant challenges to credit unions later in the interest rate cycle. NCUA's economic update video series is an ideal information resource for credit union board members, loan officers and management and is available on NCUA's official YouTube channel. TNS 30FurigayJof-131221-4586729 30FurigayJof


Source: Targeted News Service

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