In this rate environment, commercial borrowers seek the stability of a fixed rate term structure that enables them to make informed strategic budgets based on consistent payments throughout the loan's life. Yet, floating rate loans and shorter duration assets are preferred by most financial institutions in a rising rate environment. This difference creates a disconnect and increases the risk of losing commercial loan to the competition. So, what can you do to fix it?
You can develop a loan hedging strategy. This Industry Insight paper will explore how hedging can help reduce volatility, how to select the right hedging program for your credit union, and how to develop your institutions hedging strategy.