Many Asian countries are still at historically low levels of interest rates with steep yield curve as a result of the financial crisis. With the uncertainty around credit growth, financial markets and the banking environment, amongst other things, interest rate risk management is expected to continue to present challenges for the banks in Asia.
In our recent survey of North American banks, we examine how banks are responding to the uncertainty through IRR management and measurement practices. The diverse range of participants enabled us to identity trends and emerging best practices applicable to Asian banks as they seek to upgrade their IRR capabilities to global standards. In this version of The State of Interest Rate Risk Management, we take a look at how banks can shift towards a more balanced approach to managing IRR, advances in measurement and methodologies, the implications for balance sheet management and the pressure points for Asian banks.