Rising interest rates pose new risk for banks: BIS

Rising interest rates after years of loose monetary policy will pose a fresh risk to banks' ability to absorb losses using capital buffers, the Bank for International Settlements said in its annual report on Sunday. A prolonged period of ultra-low rates would further weaken the financial sector and squeeze banks' profitability, but a "normalization" of borrowing costs would reverse the debt-fueled inflation of asset prices and hit banks' own loss-absorbing equity capital, the BIS said.

Rising interest rates pose new risk for banks: BIS source: http://finance.yahoo.com/news/rising-interest-rates-pose-risk-104432115.html