FDIC | Banker Resource Center: Interest Rate Risk (2024)

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FDIC | Banker Resource Center: Interest Rate Risk (1)

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Banker Resource Center

Interest rate risk is the exposure of a bank’s current or future earnings and capital to adverse changes in market rates. This risk is a normal part of banking and can be an important source of profitability and shareholder value; however, excessive interest rate risk can threaten banks’ earnings, capital, liquidity, and solvency. Therefore, it is important to effectively identify, measure, monitor, and control interest rate risk exposure through effective policies and risk management processes.

Laws and Regulations

Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.

Supervisory Resources

Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.

Other Resources

Supplemental information related to safe-and-sound banking operations

Videos/Webcasts/Teleconferences

Informational videos and recordings of prior webcasts and teleconferences.

For Board Members:

  • The Managing Interest Rate Risk technical assistance video provides an overview of interest rate risk and how boards can best oversee this area.

For Banker:

  • The Types of Interest Rate Risk technical assistance video describes the types of interest rate risk, including examples.
  • The Measurement Systems technical assistance video provides information regarding the various interest rate risk measurement systems.
  • This Deposit Assumptions technical assistance video describes various deposit assumptions used by banks in the measurement of interest rate risk.
  • This Rate Changes and Prepayment Assumptions technical assistance video describes rate changes and prepayment assumptions used by banks in the measurement of interest rate risk.
  • This Risk Limits and Mitigation technical assistance video provides information pertaining to establishing risk limits and setting mitigation strategies used for interest rate risk management.
  • This Internal Control and Review technical assistance video describes internal controls used for and independent reviews of the interest rate risk management process.

The FDIC’s Technical Assistance Video Program includes educational videos designed to provide bank directors, officers, and employees with useful information about areas of supervisory focus and regulatory changes.

FDIC | Banker Resource Center: Interest Rate Risk (2024)
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