Big banks like Bank of America (NYSE:BAC) and Citigroup (NYSE:C) 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.
Matt Koppenheffer owns shares of Bank of America. The Motley Fool owns shares of Bank of America and Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.