A bank has a negative repricing gap. This implies that

Name: A bank has a negative repricing gap. This implies that
Brand: Quizplus
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Question

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A negative repricing gap means that the bank's liabilities (RSLs) with fixed interest rates exceed its assets (RSAs) with fixed interest rates. Therefore, the bank has a greater sensitivity to changes in interest rates as its liabilities will reprice before its assets, resulting in a potential reduction in net interest income. This implies that some RSLs are financing fixed-rate assets.

A Bank Has a Negative Repricing Gap