During the Testing Period

Top Previous Next

•	Document events that may effect the bank

External

Internal

•	Document even minor events

o	Events may seem insignificant

o	May have influence that is not immediately obvious

During the evaluation period, you will document external and internal events and conditions that may change, for later evaluation. This will help you determine the influences on the actual end results.

Even though some events may appear to be insignificant at the time they occur, go ahead and log them anyway. It may be that they have an effect on the results.

External Events / Conditions

Some of the external forces that affect your institution include:

•	Competition

•	Rate Fluctuations

•	Fed Announcements

•	Mix of Items (fixed, floating, adjustable)

•	Unique Circumstances in the Community

•	Weather (hurricanes, floods, acts of nature)

•	Real Estate / Construction Markets

•	Investment Speculation

•	Federal/State Programs and Intervention

These are all types of items you will have logged during the testing time period.

Internal Events / Conditions

Some of the internal events that affect your institution include:

•	Unique Circumstances at the Bank

•	Changes in Policy

•	Changes in Bank Rates

•	New Products Offered

•	Personnel Changes

Model Changes

•	Changes to the Chart of Accounts

•	Interim Assumption Changes

•	New Branches

•	Merging of Branches / Banks

You may even want to document changes in the model, including changes to the chart of accounts, merging of branches or banks, and interim assumption changes. These interim assumption changes are more for long term back tests where you might be changing rates/growth several times before the evaluation period.