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Glossaire

Naviguez dans le monde complexe de la gestion des devises grâce à notre dictionnaire complet de termes et de définitions financiers.

Interest Rate Risk

Interest rate risk is risk that moves in interest rates affect the value of fixed-income instruments such as bonds. Because the value of a bond is the present value of its discounted cash flows, an increase in interest rates (used as discount rates) automatically translates into a lower present value. In banking, interest rate risk is assessed both in terms of assets and liabilities. If, for example, short-term interest rates rise while long-term interest rates stay stable or fall, the net interest margin —and the bank’s profitability— would decline as a consequence.