Business customers Managing risks Interest risk Overview

Interest risk

Interest risk refers to the unpredictability of interest rate movements. Interest risk may increase Your expenses on loan repayments and decrease the income from Your assets.

Interest risk plays an especially important role in case of long term loan obligations with variable interest rates. The fluctuation of interest rates impacts long term obligations more than short term ones.

The most widely used means to manage interest risks are:

  • Interest rate cap and
  • Interest rate swap

You can use both means to combat the interest risk of loan obligations with variable interest rates at Danske Bank. For more information please contact Your client relations manager.