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Is Trouble Ahead for Big Banks?

Pain could be in store for banks when interest rates turn.

By Matt Koppenheffer – May 1, 2013 at 6:45PM EST

Big banks like Bank of America (BAC +0.60%) and Citigroup (C +0.88%) have got into trouble in the past when interest rates rose and they were unprepared for the shift due to an inadequate duration of their portfolio. With interest rates at record lows and many believing they can only go up from here, many banks are lending out less of their deposits in preparation. 

Fool.com financial analyst Matt Koppenheffer explains this dynamic today and how it could impact big banks going forward.

Read Next

About the Author

Matt Koppenheffer
Matt Koppenheffer is the former Head of the Coverage Team at The Motley Fool. He was a full-time Motley Fool employee from 2012-2025 and is a former advisor and analyst for multiple Motley Fool services. Matt's articles and analysis have been published around the world and his views have been cited in worldwide publications from the Financial Times and The New York Times to the Toronto Star and Germany's Focus Money. He has appeared to offer analysis on a variety of outlets including CNBC and NPR. Matt is the co-author of The Astonishing Collapse of MF Global as well as the creator and former co-host of The Motley Fool's Industry Focus podcast.
TMFKopp
X@KoppTheFool

Stocks Mentioned

Bank of America Stock Quote
Bank of America
NYSE: BAC
$53.85
(+0.72%)+$0.39
Citigroup Stock Quote
Citigroup
NYSE: C
$128.98
(+0.78%)+$1.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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