I think what you are missing is that the bank doesn't own the 1 billion, that is someone else's money (deposit, leverage, etc...). This is very rough estimate,

I think what you are missing is that the bank doesn't own the 1 billion, that is someone else's money (deposit, leverage, etc...). This is very rough estimate, but let's say they are making 1% on the spread in rates (I just made that up, but that feels right, if not high) then using your same calculation they are looking at ~$570k in revenue. If that $570k suddenly turns into a $3.6M loss, that could cause problems.