Interest gap: Difference between revisions

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imported>Doug Williamson
(Amend typo 'liabilities' to 'assets'.)
imported>Doug Williamson
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* [[Assets]]
* [[Assets]]
* [[Liabilities]]
* [[Liabilities]]
* [[Exposure]]

Revision as of 13:05, 27 July 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.


See also