Measuring the interest rate risk of the private banks in Syria under the international Basel standards A Case Study on the Bank of Syria and Overseas (BSO)


This study aims to show the measurement and managing of interest rate risk (IRR) in the private banks in Syria, as determined by the Central Bank of Syria, and study the effects of volatilities of interest rates on the bank's profit indicators (Income Statement) and the economic value of a bank (Balance Sheet).For realization of the scopes of the study and for testing its assumptions, it has been applied a comparative case study on the Bank of Syria and Overseas (BSO)The conclusion stated that the administration of private banks use the maturity gap method to measure the IRR , but it's not adequate to show the effects of the IRR on the financial values of assets and liabilities , and so on the owners equities (capital). So it's not relevant and not enough to make long term decisions. In the other hand the alternative method of "Duration Gap" is more relevant to show these effects on capital, so it's more accurate especially in the long term.