A fundamental economic function of the banking system is maturity transformation. This occurs when banks use short-term deposits (which can be withdrawn quickly by customers) to fund long-term loans (which are typically repaid much later by customers). Maturity transformation creates so-called interest rate risk for banks, as changes in market interest rates can affect their profitability—or even their financial soundness. Managing this risk is particularly important for banks whose business model relies on maturity transformation, which is the case for Swiss domestically focused banks. In this note, we explain why the interest rate increase in 2022 and 2023 was profitable for these banks, while further interest rate increases would have been detrimental due to the materialisation of interest rate risk.