Write ALCO commentary on interest rate risk and net interest margin
Clear asset-liability committee commentary explaining NIM drivers, rate sensitivity, deposit behavior, and recommended actions.
The prompt
Help me write commentary for our asset-liability committee (ALCO) package.
Period: [QUARTER/MONTH]
Balance sheet summary: [loans, securities, deposits by type, borrowings - with changes]
Net interest margin: [current, prior period, budget; yields and costs by category]
Interest rate risk results: [earnings-at-risk / NII sensitivity and economic value of equity (EVE) under rate shocks, against policy limits]
Deposit assumptions: [betas, decay rates, and how actual behavior compares]
Liquidity position: [on-balance-sheet liquidity, borrowing capacity, loan-to-deposit ratio]
Rate outlook we are using: [scenario or forward curve source]
Write:
1. Executive summary (5 bullets): margin direction, the biggest driver, risk position versus limits, and any decision needed.
2. NIM walk from prior period: volume, rate, and mix effects on asset yields and funding costs.
3. Interest rate risk: whether we are asset- or liability-sensitive, results by scenario versus limits, and how the profile has changed.
4. Assumption check: where actual deposit betas or prepayment speeds differ from model assumptions and how that changes the results.
5. Liquidity and funding commentary.
6. Options for ALCO to consider (e.g. pricing, funding mix, investment portfolio actions, hedging), with trade-offs.
Use only the figures I provide; mark gaps [CONFIRM]. Flag any policy limit breach or near-breach clearly at the top.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Finance & Accounting prompts
What to fill in
- QUARTER/MONTH
- current, prior period, budget; yields and costs by category
- betas, decay rates, and how actual behavior compares
- scenario or forward curve source
- CONFIRM
How this prompt is built
This prompt follows the RTF structure (Role, Task, Format). RTF tells the model who to be, what to do and what shape the answer should take. It is the quickest structure that still gives noticeably better results than a bare request.
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