State-Bank-of-India: Interest Rate Risk Management in Banks/ Financial Institution

by State Bank of India

Interest Rate Risk Management Course

Course Description

This course delves into the dynamics of Interest Rate Risk, focusing on its potential impact on banks' earnings and asset valuations due to fluctuations in interest rates. Specifically, it addresses the dual perspectives of earnings and economic value, exploring the effect on banks' Net Interest Income and Market Value of Equity. Participants will study the risk present in both the trading and banking books and learn how to use various risk management tools to mitigate these risks effectively.

What Students Will Learn

Comprehensive understanding of Interest Rate Risk, its causes, and its impact on a bank's financial health.
Insights into different interest rate risk measures essential for managing a bank's balance sheet.
Knowledge of derivatives and their application in interest rate risk management.
Techniques to assess and measure interest rate risk within banks and financial institutions.

Prerequisites or Skills Necessary

No specific prerequisites are required for this introductory course, making it accessible for learners with varying backgrounds in Economics and Finance.

Course Coverage

Introduction to Interest Rate Risk and its significance
Detailed examination of earnings and economic value perspectives
Analyzing the impact on trading and banking books
Strategic mitigation techniques and management tools

Who This Course is For

This course is ideal for banking professionals, financial analysts, risk management personnel, and anyone interested in understanding and managing financial risk in banking environments.

How Learners Can Use These Skills in the Real World

The skills acquired through this course enable professionals to effectively manage and mitigate interest rate risk, thereby enhancing the financial stability and profitability of banks. These competencies can be applied in developing strategic hedging solutions, advising on investment decisions, and optimizing banks' balance sheets against fluctuating interest rates.

Syllabus

Module 1-6: Each concludes with 5 MCQs to test understanding (not graded)
Final Test: 40 MCQs, passing requirement: 60% score after completing 90% of the course content

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