||The thesis Interest Rate Risk and Liquidity Risk of Banking Books in the Czech Republic deals with the management of interest rate risk and liquidity risk stemming from the core banking system purpose – maturity transformation. Across five articles, we provide comprehensive theoretical description, regulatory background, and develop models for embedded behavioural options of client products such as non-maturity deposits, with special focus on savings accounts in the Czech Republic in one of our case studies, or loans with prepayment option. We apply our models on the major Czech and Slovak banks and we calculate the exposure of those banks to interest rate risk in terms of regulatory guidelines. We derive that all banks in our analysis are positioned to benefit when interest rates increase as demand deposits like current accounts are traditionally stable sources of funding, while assets like mortgage loans or consumer loans reprice relatively quickly to new interest rates due to prepayment option as well as medium-term periods for which client interest rates are fixed. Such unified exposure of both banking systems can lead to systemic risk stemming from a squeeze in banks’ profitability due to low or negative interest rates.