, focusing on short-term gains but risking further losses if rates rose. Instead of hedging the market value risk of bank asset … fluctuations. More vulnerable banks were more likely to reclassify. Extending Jiang et al.'s (2023) solvency bank run model, we …

. However, we also confirm a remaining exposure to changing market rates. Our results shed light on an implicit hedging …

role in determining a bank's IRS trading activity. …

capital and liquidity ratios, the leverage ratio plays a key role in determining a bank's IRS trading activity. 5) Also, after … mandatory central clearing, there is still a large dispersion in IRS transaction prices, which is partly determined by bank …

, we conclude that swap positions are not economically significant in hedging the interest rate risk of bank assets … average bank has a large notional amount of swaps-- $434 billion, or more than 10 times assets. But after accounting for the … significant extent to which swap positions offset each other, the average bank has essentially no net interest rate risk from …

the interest rate risk regulation. Although hedging motives dominate, we find selective hedging behavior in swap use …