Now is a Good Time to Prepare for Liquidity Changes
Why be concerned about your credit union’s liquidity when most of us are flushed with funds resulting from an inflow of funds associated with a flight to safety and loan portfolio outflows due to lack of loan demand?
Rising interest rates typically are used to manage economic recoveries so it is likely rising rates will be accompanied by a return of flight-to-safety funds to the market and a spike in loan demand, putting many, in short order, back in the tight liquidity environment of a several years back.
Contingency and Alternative Funding Sources:
Loans from the Corporates — The corporate credit union is still the lender of first choice for a majority of credit unions. Loans fall into two major categories: A line of credit and a term loan.