Credit unions and other financial institutions should be extrazealous when testing their assets to see how they would be impactedby fluctuations in interest rates, because regulators will bemonitoring that closely.

That's the message from the NCUA, the Federal Reserve, the FDIC,and the Office of the Comptroller of the Currency in a letterreleased on Thursday.

“Institutions should measure the potential impact of changes inmarket interest rates on both earnings and the economic value ofcapital. Measurement methodologies generally focus on eitherchanges to net interest income/net income, or changes to theeconomic value of capital over various time horizons. Incomesimulations are typically used to measure potential volatility innet interest income/net income over various time horizons(generally one to five years),'' according to the memo.