The Profit Risk Problem

By Rich Weissman

While credit and asset liability risk measure risks in the balance sheet, “profit risk”—a term coined by DMA—refers to the concentration of different streams of profitability within the income statement.

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Stress Test Projects ... Future Cash Flow

By Lisa Hochgraf

When credit unions talk about stress tests, they're often referring to asset/liability modeling in which they enter various interest rate scenarios and look at how that will affect their financials.

When Jim Devine talks about stress tests, he is referring to modeling a business' future cash flow, so a credit union can get a read on whether a business borrower is likely to have the cash needed to make timely payments on a loan.

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