‘Twas the night before New Year’s, two-thousand-fifteen,
A most interesting year on the ERM scene.
Consumers were vulnerable to hackers’ reaches,
As merchants were “Targets” of broad data breaches.
Emerging technologies came every day:
EMV, CurrentC, and ApplePay.
Would interchange income survive the onslaught?
Or would the apparent threat amount to naught?
Stories of internal fraud hit the press,
And left many credit unions in a mess.
New capital rules loomed large on the horizon,
Amid fears that interest rates soon would be risin’.
All of these trends are well-known to us all,
And any could prove the unwary’s downfall.
But what of the macro risks CUs should fear?
What might we see in the coming New Year?
The Fed has a new Chair, a notable dove;
What will her Fed’s policy be made of?
A focus on job growth, instead of inflation,
Which could lead to rising rates throughout the nation;
If markets perceive that the Fed is behind,
It’s not inconceivable that we could find
Rates rising beyond what Fed actions suggest,
A trend that could put loan demand to the test.
Prepayments might slow, MBS might extend,
And what would result from that potential trend?
Unrealized losses, low refi demand,
Extending portfolio durations. And,
Increased attention from NCUA,
Who have warned this scenario could be in play.
So watch your portfolio, watch the rate trend,
And make sure your strategy’s not “break,” but “bend.”
Another big change on the macro risk scene
Was the mid-term elections, two-thousand-fourteen.
Frustrated voters, they carried the day,
Which helped the GOP emerge from the fray
Victorious. But would this mean that the game
Would change, or would things just remain the same?
Would any new threats emerge, or would it stay
The way things have long been inside the Beltway?
History tells us it doesn’t appear
That Washington will change within the next year.
So we don’t expect to see anything sweeping
From lawmakers that appear still to be sleeping.
On the other hand, geopolitical matters
Could leave the economy nearly in tatters.
Lower oil prices will help the consumer,
But might turn the Texas oil patch from a boomer
Into a bust, which could hamper that state,
And render its growth prospects as less than great.
Reliable forecasts aren’t easily found,
But history says oil prices will rebound.
But what of the other global threats at hand:
ISIS, and Russia, Korea, Iran?
Well, Russia is flound’ring, the ruble is crumbling,
And Putin’s political response is bumbling.
ISIS is a threat; the question is whether
Our leaders are willing to act, or to weather
The storm, until we create a coalition
That’s willing and able to fulfill the mission
Of defeating an enemy that isn’t a state;
We only can hope that they don’t act too late
To help the world mitigate this latest threat,
Which might be the greatest that we’ve seen of yet.
And finally, North Korea, which has shown us
That cyberspace may be the world’s greatest onus,
The front on which all future wars will be waged,
And the frontier on which our assets should be staged.
Should rogue states determine what movies we’ll see?
What e-mails we’ll forward? We can’t let that be.
So for tighter security, we all must ask,
Hoping that Washington’s up to the task.
Whatever the risk landscape, please be assured
That we at The Rochdale Group, true to our word,
Will be here to help you decipher it all
To help you ensure you don’t stumble or fall.
For planning and ERM, training and more,
Rochdale can help you – it’s what we’re here for.
Whatever the need, be it simple or great,
We’re ready to step up and shoulder the weight.
So fear not the risks that the New Year will bring;
Working together, we’ll tackle the thing.
In spite of the risks, we have reason for cheer
As we wish you a prosperous, healthy New Year.