Rising Interest Rate Could Hamper U.S. Banks’ Capitalization

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Mani
Published on
Updated on

Fitch Ratings in its report feels an increase in the interest rate would adversely impact bank’s capital under the proposed Basel III framework for U.S. banks. The recent increase in U.S. Treasury yields and speculation of Federal Reserve exiting bond buying program would accentuate potential risks faced by U.S. banks, according to Fitch Ratings. Interest Rate Rise Would Affect Banks’ Bond Portfolio U.S. banks are holding significantly large bank capital to conform to the proposed Basel III framework. U.S. banks’ unrealized gains on securities held in their balance sheets are at historically high levels. However, in the event of interest…

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports