SunGard: Stewardship of the balance sheet: why interest rate risk matters

While interest rates have been low since 2008, they won’t stay that way forever. For banks, the inevitable rise of interest rates will have both negative and positive effects. We need to look at two separate effects – market value losses and changes in interest income – to understand how treasurers can minimize the negative aspects of rising interest rates.

Market value changes

Market value changes on the overall balance sheet may be of some importance from a capitalization perspective

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