IRRBB Explained: How Interest Rate Risk Impacts Banks | Treasury & Risk Management

📉 What is Interest Rate Risk in the Banking Book (IRRBB) and why does it matter so much for banks today? In this video, we break down IRRBB explained in simple, practical terms — from real-world banking examples to global regulatory requirements.

You’ll learn:
✔️ What IRRBB is and why it’s one of the most important banking risks
✔️ The four key risk types: gap risk, basis risk, option risk, and CSRBB
✔️ How interest rate changes impact bank capital, profitability, and solvency
✔️ Real examples of banks hit by sudden rate moves
✔️ Global regulations: Basel Committee standards, EBA guidelines (EU), and PRA expectations (UK)
✔️ How banks measure IRRBB using Earnings-at-Risk (EaR) and Economic Value of Equity (EVE)
✔️ Why behavioural assumptions on deposits and prepayments are critical
✔️ The role of ALCO, treasury, and the three lines of defence in governance
✔️ Risk management tools: interest rate swaps, caps, floors, balance sheet structuring, and FTP

Whether you’re a finance student, banking professional, or simply curious about how banks manage risks, this video gives you a complete guide to IRRBB and why it’s back at the top of the agenda in 2025.

💡 By the end, you’ll understand not just the technical definitions, but how IRRBB really plays out across the balance sheet — and how banks protect themselves against interest rate shocks.

👉 Explore more finance insights at theindustryportal.com

If you find this video helpful, don’t forget to like, subscribe, and hit the bell 🔔 for weekly deep dives into banking, treasury, and financial risk management.

⸻

Timestamps:
00:00 Intro: Why IRRBB matters
00:55 What is Interest Rate Risk in the Banking Book?
03:03 Types of IRRBB: Gap Risk, Basis Risk, Option Risk, CSRBB
05:19 How regulators (Basel, EBA, PRA) manage IRRBB
07:32 Measurement techniques: EaR, EVE, stress tests
09:07 Governance: ALCO and the three lines of defence
10:10 Hedging and risk mitigation strategies
11:16Why IRRBB is critical in today’s interest rate environment
11:54 Final thoughts and reca

⸻

#IRRBB #Banking #InterestRateRisk #Treasury #RiskManagement #BaselIII #EBA #PRA #FinanceExplained #BankCapital #theindustryportal

———

Related Searches

• What is Interest Rate Risk in the Banking Book
• IRRBB tutorial for banking professionals
• How banks manage interest rate risk
• IRRBB measurement explained (EaR and EVE)
• How interest rates impact bank balance sheets
• IRRBB Basel guidelines explained
• Banking book vs trading book risk
• Why IRRBB matters for treasury
• IRRBB risk types gap basis option CSRBB
• Hedging interest rate risk in banks
• IRRBB governance ALCO and 3 lines of defence
• How UK PRA regulates IRRBB
• IRRBB EU EBA guidelines 2025
• Treasury explained interest rate risk
• Interest rate shocks and bank failures