Semi-annual rate and Interest gap: Difference between pages
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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. | |||
== See also == | == See also == | ||
* [[ | * [[Assets]] | ||
* [[ | * [[Behavioural gap]] | ||
* [[ | * [[Contractual gap]] | ||
* [[ | * [[Exposure]] | ||
* [[Gap report]] | |||
* [[Gap risk]] | |||
* [[Interest]] | |||
* [[Interest gap report]] | |||
* [[Liabilities]] | |||
* [[Liquidity gap]] | |||
* [[Maturity ladder]] | |||
* [[Repricing]] | |||
* [[Risk management]] | |||
[[Category: | [[Category:Financial_products_and_markets]] | ||
[[Category: | [[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.
