Effective balance sheet hedging in the current climate

Despite the expectation of additional fiscal stimulus and dovish comments from the Federal Reserve chair, the major U.S. equity indices pulled back last week amid weak economic data, rising COVID-19 cases globally, and the continued emergence of new COVID-19 variants.

Interested in seeing how your interest rate swap program stacks up relative to your peers? Perhaps your financial institution is not yet using swaps to win more commercial loan business, but would find value in reviewing and analyzing Chatham's Back-to-Back Swap Program Benchmark Statistics Report.

Ben Lewis writes for Bank Director and discusses the concerns that bankers need to consider when choosing to work with correspondent banks that offer indirect swaps to their borrowers.

The major U.S. equity indices marched higher on the week, setting fresh all-time highs, as Democratic Party victories in the two Georgia Senate runoff elections gained the party control of the Senate fueling hopes for increased fiscal stimulus.

The CEO of a community bank who actively offers indirect swaps to borrowers contacted Chatham and was looking to analyze pricing. They wanted better visibility into the economics of a $6.8M transaction the bank had recently executed.

Bob Newman discusses the transition away from LIBOR with S&P Global Market Intelligence.

The major U.S. equity indices ended the final week of the year on a high note, setting new all-time highs, as the passage of a federal stimulus bill and continued distribution of two COVID-19 vaccines in the U.S. dominated headlines and improved investor sentiment.

Credit unions have experienced a significant increase in member deposits during the pandemic which has led to excess liquidity and low-yielding cash balances. Hedging tools may help these institutions extend asset duration and improve margins while also managing their incremental rate risk.