A bank has a positive repricing gap and estimates that the spread between RSAs and RSLs will move directly with interest rates. If interest rates fall,the bank's overall NII will

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When a bank has a positive repricing gap, it means that its rate-sensitive assets (RSAs) will reprice or adjust to interest rate changes faster than its rate-sensitive liabilities (RSLs). If interest rates fall, the yield on RSAs will decrease more rapidly than the cost of RSLs, leading to a decrease in the bank's net interest income (NII).

A Bank Has a Positive Repricing Gap and Estimates That