Capital Markets Examiner School, Providence, RI

The Yield Curve & The Balance Sheet

How market forces impact balance sheet structure and strategies

Balance Sheet Structure and the Yield Curve

 Bank balance sheet structure and strategic direction is influenced by:  Level of interest rates  Competitive landscape  Profitability  Risk Tolerance  The shape of the yield curve is influenced by a number of factors, including:  Monetary policy as controlled by the Federal Reserve Open Market Committee (FOMC)  How fiscal policy influences the taxing and spending activity of the government  General health and stability of financial markets  Global financial market activity