The financial regulators of the FFIEC (i.e. the FRB, OCC, FDIC, NCUA and State Liaison Committee) have published an advisory on interest-rate risk (IRR) management, which is meant to clarify several issues left unresolved in the 2010 inter-agency guidance on IRR.1 Each of the agencies issuing this advisory has separate IRR standards, but their supervisory expectations are consistent and, thus, governed by the answers to these frequently-asked questions (FAQs). The FAQs principally delineate the responsibilities firms must undertake as their IRR risk profile changes, going beyond the initial, general indications that supervisory standards may vary by firm characteristics to specify complexity, business model and other criteria as those that trigger altered IRR risk requirements.
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