Bank Analysis School eBook

Internal Use Only

Interest Rate Changes Affect Asset Yields and Funding Costs

9.0%

7.5%

Fed Funds Rate

6.0%

Yield on Earning Assets

4.5%

3.0%

Cost of Funding

1.5%

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Internal Use Only

Interest Rate Risk is a Threat to the Net Interest Margin and Net Interest Income