CNOFX released an advisory today reminding institutions of supervisory expectations for sound practices to manage interest rate risk.
(1888PressRelease) October 07, 2010 - The China Options and Futures Exchange (CNOFX) released an advisory today reminding institutions of supervisory expectations for sound practices to manage interest rate risk. This advisory, adopted by each of the financial regulators, reiterates the importance of effective corporate governance, policies and procedures, risk measuring and monitoring systems, stress testing, and internal controls related to the exposures of depository institutions. It also clarifies elements of existing guidance and describes some management techniques used by effective risk managers.
The financial regulators recognize that some interest rate risk is inherent in the business of banking. At the same time, institutions are expected to have sound risk management practices to measure, monitor, and control exposures. The financial regulators expect each depository institution to manage its exposures using processes and systems commensurate with its complexity, business model, risk profile, and scope of operations.
The financial regulators remind depository institutions that an effective management system does not involve only the identification and measurement of interest rate risk, but also addresses appropriate actions to control this risk. If an institution determines that its core earnings and capital are insufficient to support its level of interest rate risk, it should take steps to mitigate its exposure, increase its capital, or both.
Go through http://www.cnofx.org online website, for getting complete information on Interest Rate Risk Advisory.
CNOFX released an advisory today reminding institutions of supervisory expectations for sound practices to manage interest rate risk. 
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