SHEEO Query RE Institutional Financial Risk Assessment and Stress Testing

June 26, 2018

Dear SHEEO Chief Finance Officers,

Several of your colleagues are asking for your assistance. They are interested in institutional financial risk assessment and stress testing. We would like to learn about the use of various finance measures at the state level.

1. Do you regularly or periodically collect (please indicate which) institutional credit ratings (Moody’s, Standard & Poor’s, or the Fitch Ratings)?

If they are collected, are they collected for all institutions?

2. Do you regularly or periodically collect (please indicate which) USDE’s Financial Responsibility Composite Scores for private institutions?

3. Do you regularly or periodically (please indicate which) collect or calculate all or some of the following institutional financial risk ratios (indicate which are collected or calculated):

a. Liquidity Ratio
b. Primary Reserve Ratio
c. Viability Ratio
d. Return on Net Assets Ratio
e. Net Operating Revenues Ratio
f. Composite Financial Index

If they are collected/calculated, are they collected/calculated for all institutions?

4. If you collect/calculate any or all of the finance measures, for what purpose are they collected/calculated and how are they used?

5. Any other relevant measures we should know about? Also, any related follow-up comments or questions for us?

Any guidance or feedback is appreciated.

Summary of responses

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