US banks need better defences against rates shock: regulators

Washington

YEARS of stubbornly low interest rates and expectations that they will remain low for years to come have prompted US banks to shift their balance sheets in ways that put them at risk if rates suddenly spike, regulators are warning.

Banks have been stocking up on long-term loans, often tied to real estate and property development that promise higher yields than the miniscule returns on short-term debt.