EVE/NEV

Economic Value of Equity (EVE) for banks or Net Economic Value (NEV) for credit unions measures the impact of market rates on the value of portfolio equity to the institution.

EVE/NEV values both the principal and interest cash flows to the present using discounting techniques.

Here are examples of how to use EVE/NEV results:

• Identify long-term risk exposure based on the balance sheet structure.
• Calculate the present value of the current balance sheet risk.
• Measure results compared to policy guidelines to identify areas of risk.
• Comply with Financial Accounting Standard (FAS) 107 reporting requirements.

The EVE/NEV workflow is distributed across four tabs:

Results

This tab lets you review results from the last EVE/NEV calculation.

Validation

This tab lets you review warnings regarding reconciliation, quoted market values, and forecasting data.

Manage Scenarios

This tab lets you view existing scenarios and create configurable, reusable, and non-parallel rate scenarios.

Column Setup

This tab lets you specify the values to appear in the Results tab and in reports.