Are the CUR_NET_RATE, MARGIN, and INTEREST_RATE_CD Fields Used for Floating Rate Products in ALM? (Doc ID 2187444.1)

Last updated on NOVEMBER 01, 2016

Applies to:

Oracle Financial Services Asset Liability Management - Version 6.0 and later
Information in this document applies to any platform.
Oracle Financial Services Analytical Applications (OFSAA)
Oracle Financial Services Asset Liability Management (ALM)
Financial Element (FE)

Goal

Need clarification about ALM functionality for calculating FE 430, FE 1672 & FE 672 for floating rate products.  For Floating Rate Accounts, interest rate calculation should not be done based on Cur Net Rate.  For interest calculation, it requires Margin + Interest rate CD term point based on various Forecasting Rate Scenario including base scenario.

Cur Net Rate therefore should only be applicable for Fixed Rate Products.  Interest rate from Interest Rate CD (IRC) is based on term point. The term point here should be Repricing Term, not the original term of the account. In liquidity gap as well interest FE & principal FE is for full term of the account not till repricing date. It is only with repricing GAP that principal FE runoff is till repricing date.

Solution

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