Interest gap: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Link added) |
(Add links.) |
||
(7 intermediate revisions by one other user not shown) | |||
Line 1: | Line 1: | ||
A mismatch in the timing at which interest | 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. | A positive gap (assets repricing more quickly than liabilities) means an exposure to falling interest rates and vice versa. | ||
Line 14: | Line 14: | ||
== See also == | == See also == | ||
* [[Assets]] | * [[Assets]] | ||
* [[Behavioural gap]] | |||
* [[Contractual gap]] | |||
* [[Exposure]] | |||
* [[Gap report]] | |||
* [[Gap risk]] | |||
* [[Interest]] | |||
* [[Interest gap report]] | |||
* [[Liabilities]] | * [[Liabilities]] | ||
* [[ | * [[Liquidity gap]] | ||
* [[Maturity ladder]] | |||
* [[Repricing]] | |||
* [[Risk management]] | |||
[[Category:Financial_products_and_markets]] | |||
[[Category:The_business_context]] |
Latest revision as of 21:20, 4 December 2023
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.