|| Thursday, August 15, 2019
||3:00pm - 4:15pm
These are the best of times and the worst of times!
Strong economy, record profits and stock market levels, low unemployment, no inflation to speak of, less regulation and lower tax rates. However, slowing loan growth, low rates and the recent yield curve inversion are causing shrinking margins and ultimately lower levels of income throughout the banking industry. This convergence of challenges mandates that financial institutions develop a meaningful and cost-effective funding game plan to support the growth requirement of their institutions.
High-performing institutions develop a wholesale funding strategy to complement their retail/commercial deposit generating activities. It’s prime time to take a look in the mirror and challenge yourselves as to the appropriateness of your funding strategy(ies). Now is not necessarily the time to shrink wholesale funding levels but rather, to consider how wholesale funding can support your earnings challenges in this historically low rate environment. In doing so, you may find that wholesale funding is a necessary and profitable risk management tool, especially now when borrowings may be the last thing on your mind.
Learning objectives from this session:
- Myth vs. Reality; Learn how to overcome common reasons for not using wholesale funding including cost, lack of spread, does little to increase franchise value, perceived negative regulatory attitude, board dislike for borrowings and more
- Go long or stay short with funding? If extending, how far? What structures? Alternatives explored
- Selling options to lower the cost of funding; opportunity or trap?
- Buying options to manage risk to rising and falling rates-pros/cons revealed
- Liquidity measuring & managing liquidity from a business perspective
- Liquidity policy limits and ratios to consider (and avoid)
- Profitable opportunities for utilizing FHLB Des Moines advances in today’s rate environment; ignore at your own peril!
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Speaker: Frank Farone, Managing Partner, Darling Consulting Group
Frank consults nationwide with CEOs and CFOs of financial institutions to increase earnings. He is a frequent speaker and author and was rated a "top-rated" speaker by FMS and is known for his seminar "Turbo Charging Your ALCO Process." Frank is a graduate of Siena College and an avid golfer and runner.
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