End of the Testing Period

At the evaluation date, you will process your actual results for the month end, as usual, then run several reports which will indicate the variances between projections and the actual results.  You can then analyze and determine the reasons for the variances deemed to be significant.  This may involve more than one person to review the variances, depending on your bank’s operations.

Findings should be documented.  It will then be time to make upcoming projections in the model.  You can revise those projections to be more realistic, based on your evaluation of the back test.

As you can see, this is a on-going process of evaluation and fine tuning the model.  Thus keeping to the ultimate goal of evaluating and controlling interest rate risk with IRR-Solutions® II.