Finance for the bank and credit union directors: Lending is a ...

When it comes to funding education director, dissolve the differences between banks and credit unions. The message is clear for all administrators. Understand your financial institution's finances well enough to do your work as a director.

To answer these questions?

How do I know what I know finances financial institution?
How do I know if I know him well enough?
How do I prove that I met myThe responsibilities in this area?

Duty of care

All directors of each edge type of a "duty of care" that requires "a lot of care, including reasonable inquiry, as is usually prudent person in a similar position would use under similar circumstances."

The idea of ??a reasonably prudent person does not provide a clear definition. At the very least, the director should seek information from reliable sources outside of their financial institutionManagement. Bank and credit union conferences are a good source for this external perspective. I recommend that every director to keep their own records of your training.

Test yourself: The Seven Risks

The controllers have some help. Here's a quiz. Before proceeding to read these articles:

List the seven types of risks identified in depository institutions and regulators for a director to keyunderstand
Define each of the seven in one or two sentences
Evaluate your financial institution on any (poor, fair, good, very good) and explain why you chose to vote

I will tell you the risk seven at the end of this article. Before we look, consider how difficult or easy, that was a fast exercise. If you're a filmmaker, you need a better understanding of the risks and how to assess your financial institution in the seven areas?

Test yourself: your package Council

If you get the next package on board, see the "Dashboard" metrics provided. There is information about the relationship between capital? Growth in loans? Deposit growth? Loan to deposit? I'm not saying these are the best or only metric to monitor the card, but I wonder what you're made available.

Then consider:

Understand how the metric is calculated?
Increases or decreases in rates of these parameters?
If you change, is that the movement orthis direction, expected or unexpected?
Do you know what is the goal? Is there a goal?
How and why is it important to your financial institution?
How and why it is important that the Board notes that the metric?

Whose "duty of care 'is it anyway?

The "duty of care 'is an individual duty of every director. And' one of the things that you can not delegate the management or other directors. Three steps to fulfill the duty of care includesindependent actions mean for your financial institution's finances, knowing the risks that are responsible for monitoring and questions about the financial information at board meetings.

The seven risk

To identify the risks associated with the controllers, you're right. How did you do?

Credit
Liquidity
Interest rate
Attention
Strategically
Transaction
Reputation

Finance for the bank and credit union directors: Lending is a risky business

Source: http://www.financialcrossing.com/finance-for-the-bank-and-credit-union-directors-lending-is-a-risky-business/

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