title = "Interest Rate Risk: Fixed vs. Floating Rates"

content = """
Interest rate risk is the potential for financial loss due to fluctuations in
market interest rates. Silver Oak Bank manages this risk by offering both fixed
and floating rate structures, each with distinct implications for the bank and
the borrower.

**Floating Rate Loans:**
Typically tied to a benchmark like SOFR (Secured Overnight Financing Rate) plus a
spread (e.g., SOFR + 2.50%). The interest expense for the borrower increases if
market rates rise, but the bank's interest margin remains relatively stable. This
is common for revolving lines of credit.

**Fixed Rate Loans:**
The interest rate is locked for the duration of the loan (or a specific period).
This provides the borrower with payment certainty, but the bank faces 'Market-to-
Market' risk if rates rise significantly, as the loan's value on the bank's
balance sheet decreases.

**Interest Rate Swaps and Hedges:**
For large term loans, Silver Oak Bank may require or offer an interest rate swap.
This allows a borrower to 'swap' their floating rate payment for a fixed rate,
effectively hedging their exposure to rising rates while the bank maintains its
floating rate asset.
"""

version = "0.0.1"
