If he were that kind of hands-on manager, this mess might not have happened in the first place.
The real risk-free rate is 4%. 1. The real risk-free rate is 4%. Inflation is expected to be 3% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.
by Emily Greenwald, Assistant Vice President, Federal Reserve Bank of Chicago and Doug Gray, Managing Examiner, Federal Reserve Bank of Kansas City. Interest rate risk (IRR) is defined as the potential for changing market interest rates to adversely affect a bank's earnings or capital protection. Two previous issues of Community Banking Connections included articles on IRR management for community banks.