ALM 201 - Part II - Exploring Net Economic Value (NEV) - Chapter 11

23/05/2014 3 min
ALM 201 - Part II - Exploring Net Economic Value (NEV) - Chapter 11

Listen "ALM 201 - Part II - Exploring Net Economic Value (NEV) - Chapter 11"

Episode Synopsis


The concept of net economic value (NEV) and its role in estimating interest rate risk is widely misunderstood by credit union executives. Economic value is an excellent methodology to estimate the longer-term risks associated with any loan extending beyond five years. NEV effectively measures the opportunity cost of holding long-term, fixed-rate assets in a rising-rate environment. We will demonstrate how this works.

Chapter 11: Summary and Wrap-Up