How Do Interest Rates (and Depositors) Impact Measures of Bank Value?

Stephan Luck, Matthew Plosser and Josh Younger

No 20230407b, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The rapid rise in interest rates across the yield curve has increased the broader public’s interest in the exposure embedded in bank balance sheets and in depositor behavior more generally. In this post, we consider a simple illustration of the potential impact of higher interest rates on measures of bank franchise value.

Keywords: interest rate risk; banks; valuation (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Date: 2023-04-07
New Economics Papers: this item is included in nep-ban
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