Abstract
The study examines how interest rate risks are managed at the
Jordanian commercial banks, and explores how far the strategy
pertinent to interest rate swaps is implemented in terms of managing
interest rate risks at the Jordanian commercial banks. The sample
studied consists of l 3 Jordanian commercial banks during the period
2000-2005. The empirical method has been used for investigating
the real financial data taken from balance sheets issued by these
banks. Data were analyzed, hypotheses were tested using the simple
and multiple linear regressions, and paired sample T- test.
The Study came to the following major conclusions:
implementing the modern strategy based on using interest rate
swaps proved that such strategy is active, efficient and superior’ to
the conventional strategy used in Jordanian commercial banks. This
led to reducing risks and increasing profits. The modern strategy
based on using interest rate swaps has never been implemented at
the Jordanian commercial banks. This study has been concluded
with implementing a strategy based on using interest rate swaps
for managing interest rate risks at the Jordanian commercial banks.
The method of using these instruments has already been explained
in detail.