Dynamic gap
From ACT Wiki
Jump to navigationJump to search
Banking.
A mismatch in the timing at which interest rate assets and liabilities are likely to reprice based on all of:
- Their contractual terms; and
- An assessment of customers' and the bank's expected behaviour; and
- The recognition that the behavioural assumptions are themselves functions of other factors, including the interest rate change itself.
Dynamic gaps are a refinement of behavioural gaps.
