- The board of directors and senior bank management are responsible
for the establishment, approval, implementation, oversight, and annual
review of IRR management strategies, policies, procedures, and limits
(or risk tolerances).
- Analysis of an institution's exposure to IRR should include assessing
the likely effects of meaningful stress scenarios, including interest rate
shocks of at least 300 to 400 basis points
- Capital and earnings should be sufficient to support an institution's IRR
- If IRR measures approach or exceed risk limits, management should
take steps to limit or mitigate the exposure, for example, by hedging or
altering the balance sheet.
- Financial institutions are expected to conduct independent reviews of
their IRR models and management processes. If third-party models
are used, management should obtain documentation of the results
from reviews conducted by the vendor.
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer
Joint Agency Policy Statement on Interest Rate Risk, FIL-52-96
FDIC Press Release on IRR Advisory
FFIEC Press Release on IRR Advisory
FFIEC Advisory on Interest Rate Risk Management - PDF (PDF Help)
Kyle Hadley, Chief, Exam Support, at
KHadley@fdic.gov or (202) 898-6532
FIL-2-2010 - PDF (PDF Help)
FDIC financial institution letters (FILs) may be
accessed from the FDIC's Web site at
To receive FILs electronically, please visit
Paper copies of FDIC financial institution letters may
be obtained through the FDIC's Public Information
Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1-877-275-3342 or 703-562-2200).