Economic Value of Equity Model

Many of you have heard my soapbox speech about the foolishness of Economic Value of Equity calculations and models. I have recent reports of examiners who acknowledge the minimal value of the models but fall back on the “Washington says we have to check and see if you have one” line. In most examinations, it appears that EVE is a “check the box” issue. If you have an EVE report, the examiners don’t take the time to see what it says or how it was calculated. They are happy to be able to mark it off their list and move on to other tasks.

We have been working on an EVE report worthy of the APC logo, and I think we have come up with
a viable product. I plan to introduce it using September 2011 data and make it a quarterly or annual report (your preference). We will have most of the necessary data in our files but will need a new securities report that provides shocked market values. We will be calling soon to request the data and give you information on acquiring it from your portfolio accounting firm.