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Net Interest Income

Given it’s importance why is it that many firms don’t target NII?

It’s just not a regulatory priority. The main concern for the regulator is whether the capital supports the business. Just as night follows day preoccupation by the regulator on certain things draws in management too. The PRA concentrates on solvency not what makes you solvent.  Basis risk also attracts regulatory scrutiny and in a similar way management attention is pulled towards it.  Capital and basis risk are linked by the NII.  Read more here:Net interest income

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