Indirect method 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. | |||
The | |||
== See also == | == See also == | ||
* [[ | * [[Assets]] | ||
* [[ | * [[Gap report]] | ||
* [[ | * [[Liabilities]] | ||
* [[ | * [[Liquidity gap]] | ||
* [[Maturity ladder]] | |||
[[ | * [[Exposure]] | ||
[[ | |||
Revision as of 08:52, 12 August 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.
