assets but left the vast majority of their long-duration assets exposed to interest rate risk. Data from call reports and SEC … filings shows that only 6% of U.S. banking assets used derivatives to hedge their interest rate risk, and even heavy users of …, focusing on short-term gains but risking further losses if rates rose. Instead of hedging the market value risk of bank asset …

change and the economy; and (iii) further explore "compound risk" scenarios in which climate risks co-occur with other risks … risk pricing in financial markets; and (iv) better understand and incorporate the process of expectations formation around …

Motivated by the regional bank crisis of 2023, we model the impact of interest rates on the liquidity risk of banks …. Prior work shows that banks hedge the interest rate risk of their assets with their deposit franchise: when interest rates … the bank. The liquidity risk of the bank thus increases with interest rates. We provide a formula for the bank's optimal …

This paper studies banks' investment in risk management practices following the Global Financial Crisis and the advent … of stress testing. Banks that experienced greater losses during the Crisis exhibit stronger demand for risk management … performance on a test. Following this higher demand, banks exhibit lower systematic risk and lower profitability. While stress …