of monetary policy to bank lending and real activity. When the Fed Funds rate rises, banks with a larger income gap … factors known to affect the transmission of monetary policy to bank lending. It also holds on loan-level data, even when we …

moves in sync with the shape of the term structure. At bank level, however, the time variation of the exposure is largely …

policy shocks to bank lending and real activity. We first use a large panel of U.S. banks to show that the sensitivity of … bank profits to interest rates increases significantly with measured income gap, even when banks use interest rate … derivatives. We then document that, in the cross-section of banks, income gap predicts the sensitivity of bank lending to interest …

We investigate whether banks actively manage their exposure to interest rate risk in the short run. Using bank …

policy shocks to bank lending and real activity. We first use a large panel of U.S. banks to show that the sensitivity of … bank profits to interest rates increases significantly with measured income gap, even when banks use interest rate … derivatives. We then document that, in the cross-section of banks, income gap predicts the sensitivity of bank lending to interest …

Motivated by the regional bank crisis of 2023, we model the impact of interest rates on the liquidity risk of banks … valuable if depositors remain in the bank. This creates run incentives for uninsured depositors. We show that a run equilibrium … the bank. The liquidity risk of the bank thus increases with interest rates. We provide a formula for the bank's optimal …

Interest rate risk is the exposure of a bank's financial condition to adverse movements in interest rates. Accepting …, excessive interest rate risk can pose a significant threat to a bank's earnings and capital base. Changes in interest rates … affect a bank's earnings by changing its net interest income and the market value of Equity. As a part of measuring and …