Monetary Tightening's Stress Test: How Interest Rates Reshape Bank Resilience
Published on: Sept. 30, 2025, 10:19 a.m. | Source: Devdiscourse
The IMF study finds that higher interest rates have mixed effects on banks: they boost margins for some but drive loan losses and market hits for others, with outcomes shaped by business models and funding structures. Strong borrower-based macroprudential policies significantly cushion these risks, making banking systems more resilient to tightening cycles.
