The Difference GAP – The Main Instrument Used in the Management of Banking Assets and Liabilities

Luminita Gabriela Istrate ()
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Luminita Gabriela Istrate: The Bucharest Academy of Economic Studies

Ovidius University Annals, Economic Sciences Series, 2016, vol. XVI, issue 2, 527-531

Abstract: The analysis of the difference GAP is the main instrument used to manage bank assets and liabilities, to administer the net interest from income and to protect it against interest rate risk and to manage cash flow in the short term. The information obtained from the analysis shall be used either to protect the net income from interest compared to the interest rate change by adjusting the sensitive assets / liabilities or to amend by means of the speculative operations the dimension of the difference GAP, while trying to increase the net income from interest. This is done by means of the speculative use of changes in interest rates which implies an interest rate forecast as close as possible to the market.

Keywords: interest rate; liabilities; assets; liabilities sensitive to interest rate; risk exposure (search for similar items in EconPapers)
JEL-codes: E00 G20 G21 G32 (search for similar items in EconPapers)
Date: 2016
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