at 3%, lend it at 6%, and be on the golf course by 3 p.m.) are over. Rising interest rates can leave a bank with long-term 6% mortgages while savings interest costs rise well above that level. Borrowing long and lending short can cause similar risks if interest rates fall.

So banks concentrate on spread management -- matching maturities of assets and liabilities. But this means that an improved bottom line requires boosting noncredit income and curbing noncredit expenses.

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