Toughing Out the Rate Spike

Banks have been conspicuously quiet about the impact of spiking interest rates on their balance sheets this month. A new research report argues managements are simply keeping quiet in the hope the problem doesn't worsen.

To date, most financial firms have said little about how they are coping with the 150-basis-point spike, which seems to have finally leveled off in the 10-year note. Speculation continues to be rife that someone is licking his wounds after guessing wrong on rates.

The nation's banks have been especially quiet, even though many invested heavily in mortgage-backed securities and regularly use the 10-year Treasury note as a hedge against interest rate fluctuations. ...