Interest gap: Difference between revisions
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* [[Contractual gap]] | * [[Contractual gap]] | ||
* [[Gap report]] | * [[Gap report]] | ||
* [[Gap risk]] | |||
* [[Interest gap report]] | * [[Interest gap report]] | ||
* [[Liabilities]] | * [[Liabilities]] | ||
Revision as of 12:57, 30 October 2016
A mismatch in the timing at which interest rate assets and liabilities are repriced.
A positive gap (assets repricing more quickly than liabilities) means an exposure to falling interest rates and vice versa.
Banks and other financial institutions commonly have a 'structural' interest gap, resulting from the nature of their business and the structure of their balance sheets.
This structural interest gap is usually negative.
The negative interest gap results from shorter-term liabilities funding longer term assets.
