Dynamic gap

Banking.

A mismatch in the timing at which interest rate assets and liabilities are likely to reprice based on all of:

• Their contractual terms; and
• An assessment of customers' and the bank's expected behaviour; and
• The recognition that the behavioural assumptions are themselves functions of other factors, including the interest rate change itself.

Dynamic gaps are a refinement of behavioural gaps.

See also

• Behavioural gap
• Contractual gap
• Gap report
• Interest gap report
• Interest gap
• Liquidity gap