The Advisory addresses prudent IRR management practices, especially in light of current financial market and economic conditions. It is consistent with existing NCUA guidance and stresses the importance of effective:
- Corporate governance by your board of directors and senior management;
- Policies and procedures governing all aspects of your IRR management process;
- Risk measuring and monitoring systems commensurate with the size and complexity of your institution;
- Stress testing, including both scenario and sensitivity analysis;
- Risk mitigation strategies; and,
- Internal controls to ensure the integrity of all elements of your IRR management process.