Capital Markets Examiner School, Providence, RI

Policy Limits

• How do banks set policy limits?

– Randomly

– Recommended

– Purchased

– Calculated

Assessing Policy Limits (Real Life Example)

12/31/2018 Actual • NII

+/- 100 bp shock NII Limit: -25% • NII 2,233 • Non Int Inc 751 • Non Int Exp 3,120

2,978

• Non Int Inc • Non Int Exp

751

3,120

• Pre-Tax Op Income 609

• Pre-Tax Op Income (136)