Published in: CUNA CFO Councils
With a long list of tasks to accomplish and a constant pressure to succeed, some credit union managers might regard risk-management procedures as taking time away from projects that could contribute more to overall profitability. Though it’s conceivable someone could focus too much on risk management, when performed correctly the process is a critical element to long-term success.
Some credit unions have a higher tolerance for risk than others. Usually, accepting more interest-rate risk is seen as a way to generate higher returns; it’s true that risk avoidance could cause lower profitability. Still, excessive interest-rate risk can put a credit union in jeopardy if the market takes an unexpected turn.