Wihlborgs Fastigheter AB (Wihlborgs)(STO:WIHL), a property company that focuses on commercial properties in the Oresund region, announced on Thursday the restructuring of its portfolio of interest-rate derivatives following a review of the company's management of interest-rate risk
The negative impact of rising interest rates for Omani banks is at odds with the Basel interest-rate risk
disclosures in their financial statements, which imply that a 200bp parallel upwards shift in the yield curve would benefit margins.
The Basel Committee on Banking Supervision is weighing updating its standards for capturing interest-rate risk
on assets banks plan to hold to maturity, Stefan Ingves, the regulator's chairman, said in an interview.
Loans held in portfolio need to be backed by capital to address three risks: normal credit risk, interest-rate risk
, and catastrophic risk.
That interest-rate risk
stool consists of repricing, embedded options, basis and yield curve risks.
But one pension consulting firm warns that in the current environment, plan sponsors should be wary of implementing a popular approach to limiting a plan's interest-rate risk
, called liability-driven investing (LDI).
A mortgage originator could either commit to selling a mortgage to Freddie Mac at a specific price and pay a small application fee, or obtain pre-approval for a later purchase of a mortgage at a variable price (along with a degree of interest-rate risk
protection) and pay a larger "commitment fee."
"We're telling investors not to invest in long-term corporate and Treasury bonds because that's where the interest-rate risk
is the greatest."
"We have not taken a great deal of interest-rate risk
because rates have been so low and I think we're very well-positioned to grow our bottom line in the future, and that bodes well for our stock."
We find that bank analysts' risk and value judgments distinguish banks' exposure to interest-rate risk
only under full-fair-value-income measurement.