Preliminary communication

INTEREST RATE RISK IN BANKING – SOURCES AND EFFECTS

Igor Živko

Abstract

Interest rate risk is an important financial risk in banking business. Since the bank cannot be isolated from the influence of the interest rate risk, but at the same time, it can protect itself from the unfavourable risks of the interest rate trends, the bank management must understand the sources and effects of the interest rate risks. This paper will also show some possible effects of the interest rate risk in banking, which can be a protection mechanism, if perceived in time. Interest rate risk impact on the bank financial situation is seen through the influence on the economic and market value of the bank.

Keywords

bank; interest rate risk; interest rate risk sources; interest rate risk effects; ALCO

Hrčak ID:

10679

URI

https://hrcak.srce.hr/10679

Publication date:

18.12.2006.

Article data in other languages: croatian

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