Unit trust and Reset risk: Difference between pages
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'' | ''Floating interest rates - risk management - repricing risk.'' | ||
Reset risk is a type of repricing risk. | |||
Repricing risk is the risk of adverse effects resulting from changes in floating interest rates. | |||
Reset risk is the additional risk resulting from a relevant reference rate being observed on a single day - and then incorporated into a longer contractual period. | |||
"There is [ ] no ‘reset risk’ in Risk Free Rates (RFRs) since the interest rate coupon will be reflective of market observations over the entire interest rate period, not just on the reset date." | |||
''Pieter Bierkens, former chair of Australia's LIBOR reform working group - The Treasurer, December 2023 Issue 4, p30.'' | |||
== See also == | == See also == | ||
* [[ | * [[Assets]] | ||
* [[ | * [[Behavioural gap]] | ||
* [[ | * [[Contractual gap]] | ||
* [[ | * [[Coupon]] | ||
* [[ | * [[Exposure]] | ||
* [[Floating rate]] | |||
* [[Gap report]] | |||
* [[Gap risk]] | |||
* [[Interest]] | |||
* [[Interest gap ]] | |||
* [[Interest rate]] | |||
* [[Interest rate risk]] | |||
* [[Liabilities]] | |||
* [[Liquidity gap]] | |||
* [[Maturity ladder]] | |||
* [[Rate reset]] | |||
* [[Repricing ]] | |||
* [[Repricing risk]] | |||
* [[Risk-free rates]] (RFRs) | |||
* [[Risk management]] | |||
[[Category:Financial_products_and_markets]] | [[Category:Financial_products_and_markets]] | ||
[[Category:Identify_and_assess_risks]] | |||
Latest revision as of 22:03, 4 December 2023
Floating interest rates - risk management - repricing risk.
Reset risk is a type of repricing risk.
Repricing risk is the risk of adverse effects resulting from changes in floating interest rates.
Reset risk is the additional risk resulting from a relevant reference rate being observed on a single day - and then incorporated into a longer contractual period.
"There is [ ] no ‘reset risk’ in Risk Free Rates (RFRs) since the interest rate coupon will be reflective of market observations over the entire interest rate period, not just on the reset date."
Pieter Bierkens, former chair of Australia's LIBOR reform working group - The Treasurer, December 2023 Issue 4, p30.
