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FDIC released the Winter 2008 issue of Supervisory Insights. Articles address topics of critical interest to examiners, bankers, and supervisors:
Ø an overview of problems that can emerge from the use of different asset and liability liquidity sources, including a discussion of best practices for developing an effective liquidity contingency plan;
Ø a discussion of the features and potential risks of reverse mortgages;
Ø an overview of the FDIC’s methodology for examining for compliance with Section 5 of the Federal Trade Commission Act; and
Ø a review of the changes enacted by the Financial Accounting Standards Board that will affect accounting for business combinations
The Changing Liquidity Landscape article describes how problems on the asset side of a bank’s balance sheet can cascade to a liquidity run and discusses some steps that institutions can take to anticipate and mitigate liquidity risks.
The article on Reverse Mortgages identifies risks for consumers and lenders, offers suggestions for mitigating those risks, and discusses key regulatory and supervisory concerns.