Objectives On completion of this tutorial, you will be able to:

• Define interest rate risk and identify the different types of reference rate used by banks
• Identify the potential impact of interest rate risk on a bank and the need to manage this risk
• Recognize how banks approach the management of interest rate risk and the expectations of regulators in relation to this

Tutorial Overview Banking products are affected by interest rates in different ways. As such, it is important to understand the potential impact of interest rate risk on a bank's earnings and economic value. This tutorial introduces the concept of interest rate risk and how banks manage it. Note that the focus of the tutorial is primarily on interest rate risk in the banking book - interest rate risk for the trading book falls within the scope of market risk. Prerequisite Knowledge Risk Management - Risk Types & Measurement Tutorial Level: Intermediate Tutorial Duration: 50 minutes