CHAPTER TWELVE

Managing Interest Rate and Liquidity Risks

CHAPTER STRUCTURE

Section I The Changing Face of Banking Risks

Section II Asset Liability Management

Section III Interest Rate Risk Management

Section IV Managing Interest Rate Risk with Interest Rate Derivatives

Section V Liquidity Risk Management and Basel III

Section VI Applicability to Banks in India

Chapter Summary

Test Your Understanding

Topics for Further Discussion

Annexures I, II, III, IV, V, VI (Case study)

KEY TAKEAWAYS FROM THE CHAPTER
  • Understand why risk management is important for banks.
  • Understand sources of asset liability risk, interest rate risk and liquidity risk.
  • Learn how interest rate risk is managed.
  • Learn how interest rate derivatives work.
  • Learn how liquidity ...

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