Hoosier Banker 39 • Liquidity – Historically, during recessions and falling rate scenarios, deposit levels increase, and liquidity levels grow. Ensure your assets are fully deployed to optimize your earning asset mix while keeping a cushion of unencumbered liquid assets. Lastly, every institution should have ample contingent liquidity sources for those unforeseen liquidity events and needs. • Stress Testing – Stress testing should be done on a regular basis. It’s important to consider higher impact, lower probability scenarios when creating stress scenarios. Stress testing can be conducted on various aspects of the institution including capital, liquidity and interest rate risk. “How can we better prepare for a possible recession?” I encourage you to put this question as an agenda item for your next ALCO meeting. Every institution’s balance sheet and risk profile are unique. There is no one-size-fits-all strategy but being proactive and having a plan (as well as contingency plans) is essential. HB • Hoosier Banker, IBA's flagship publication, is distributed bimonthly to 7,300+ digital subscribers, plus 3,850+ hard copy subscribers. Please email feature articles for consideration, or items for Associate Members Corner, to Evan Hoffmeyer at EHoffmeyer@ indiana.bank. Deadlines are the 20th of the month, two months before publication. Associate Member Publication Opportunities Associate members of the Indiana Bankers Association are invited to share information and news with Indiana bankers through Hoosier Banker magazine and the IBA Service Provider Showcase e-newsletter. Not sure who to contact? Email any one of us and we’ll follow up, or call 317-387-9380. • Service Provider Showcase, a monthly e-newsletter, keeps member banks connected with the service provider community. Associate members may submit articles, company accolades and upcoming webinars/events. Email materials to Emily Brooks at EBrooks@ indiana.bank.
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