Prepayment risk: Difference between revisions
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imported>Doug Williamson (Create the page. Source: IASB discussion paper DP/2014/1 p28 Accounting for dynamic risk management.) |
imported>Doug Williamson (Add link.) |
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The financial institution therefore has an interest rate exposure for the - as yet unknown - prepayments by customers of its fixed interest rate product. | The financial institution therefore has an interest rate exposure for the - as yet unknown - optional prepayments by customers of its fixed interest rate product. | ||
== See also == | == See also == | ||
* [[Early Repayment Charge]] | |||
* [[Extension risk]] | |||
* [[Interest rate risk]] | * [[Interest rate risk]] | ||
* [[Option risk]] | |||
* [[Pipeline risk]] | * [[Pipeline risk]] | ||
* [[Prepayment]] | |||
* [[RMBS]] | |||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
Latest revision as of 16:44, 13 November 2016
Prepayment risk is a form of interest rate risk for a financial institution.
It arises from the non-contractual early repayment by customers of, for example, fixed rate mortgages.
The financial institution therefore has an interest rate exposure for the - as yet unknown - optional prepayments by customers of its fixed interest rate product.
