PREMIUM CONTENT
This is premium content, available to Connect Plus users only
Unlock this content and more with Connect Plus membership.
Join a community of professionals and get:
Join a community of professionals and get:
15% discount
on all CeFPro events.
on all CeFPro events.
Post-event access:
unlock speaker decks and audience polls.
unlock speaker decks and audience polls.
Instant insights:
Full library access the moment you sign up.
Full library access the moment you sign up.
Article
Regulation squeezing banks into dangerous balance sheet trade offs
Tight regulatory thresholds on interest rate risk are forcing banks into constrained balance sheet positions, raising concerns that compliance may come at the expense of long-term stability and effective risk management.
Apr 10, 2026
Center for Financial Professionals ,
Tags:
ALM, Treasury and Liquidity Risk
Regulation and Compliance
The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization
- Regulatory thresholds
are forcing banks into narrow balance sheet positioning
- Trade-off between net
interest income and economic value of equity limits flexibility
- Five percent NII
threshold seen as disproportionately restrictive
- Compliance actions
may increase long-term risk exposure
- Structural factors
like low deposit rates amplify sensitivity challenges
- Divergent shock
scenarios across currencies raise fairness concerns
- Banks increasingly
adopting dual reporting for regulatory and internal views
- Focus shifting from
real risk management to regulatory compliance
- Proposed shock
increases could further constrain banks
- Industry warns of
potential unintended systemic consequences
Log in to continue or register for free
WHAT'S INCLUDED:
Unlimited access to peer-contribution articles and insights
Global research and market intelligence reports
Discover Connect Magazine, a monthly publication
Panel discussion and presentation recordings
Sign in to view comments
Related insights —