2 min read

The work of the European Banking Authority on interest rate risks for the banking book (IRRBB) and credit spread risk arising from non-trading book activities (CSRBB) elaborates on the technical aspects of the management and supervision of interest rate risk.

This implies risks to a bank's earnings and capital position arising from the impact of adverse movements in interest rates. Accepting this risk is a normal part of banking and can be an important source of profitability and shareholder value. However, sound risk management is important as excessive interest rate risk can also threaten a bank’s financial position.

go to top