Interest rate risk management in the New Zealand banking system, a statement from the Reserve Bank of New Zealand said.

´´The recent collapse of silicon valley bank highlights the importance of managing interest rate risk effectively, especially in a rising interest rate environment.´´

´´This risk is caused by fluctuations in the value of banks’ assets and liabilities as interest rates change. If not managed well, changing interest rates can adversely affect banks’ capital and liquidity positions.´´