earnings at risk (EAR)
The quantity by which net income is projected to decline in the event of an adverse change in prevailing interest rates. One measure of an institution's exposure to adverse consequences from changes in prevailing interest rates.
See value at risk ( VAR) for an alternative measure. American Banker Glossary
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EAR UK US noun [C] BANKING, FINANCE
► ABBREVIATION for Effective Annual Rate: the rate of interest paid on an investment or a loan in one year that includes compound interest (= interest calculated on both the amount of money and the interest added to it): »
The bank's overdraft rate is 0.94% (11.9% EAR).
Financial and business terms. 2012.