mismatch risk

mismatch risk
(1) The risk that a financial institution will suffer either a decline in income or capital because future changes in prevailing interest rates impact assets more or less than they impact liabilities. The component of interest rate risk arising from differences in the timing of asset and liability repricing.
Also called gap or repricing risk.
(2) The risk that a financial institution will suffer either a decline in income or capital because of future funding problems. The component of liquidity risk arising from differences in the timing of cash inflows and outflows.
Also called liquidity gap or liquidity mismatch risk. American Banker Glossary

Financial and business terms. 2012.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Mismatch Risk — 1) A category of risk that refers to the possibility that a swap dealer will be unable to find a suitable counterparty for a swap transaction for which it is acting as an intermediary. 2) The risk that an investor has chosen investments that are… …   Investment dictionary

  • liquidity mismatch risk — liquidity mismatch or liquidity mismatch risk The expected amount of liquidity risk based on the mismatch between contractual amounts and dates for inflows and outflows. Also called funding gap, liquidity gap, or term liquidity risk. One of the… …   Financial and business terms

  • Risk management —   Risk management is the management that is engaged in the control and monitor the risks of the bank. They must be aware of the exposure of the bank as a whole at any time.   The following reports exist to manage the following risks (created by… …   International financial encyclopaedia

  • Mismatch position —   For Forex Book: Difference between amounts of outstanding forward purchases and outstanding forward sales, per currency resulting from outstanding forward contracts measured over a defined period.   For Money market Books: Difference between… …   International financial encyclopaedia

  • Mismatch per book — A standard position. Not yet defined. Related positions are: • Open Currency Position. • C/A nature. • Capital & P&L. • B/S Difference Position. • Mismatch/Book. • Call. • Mismatch Position per Book Spot. • Mismatch Position per Book Forward. •… …   International financial encyclopaedia

  • Mismatch per product —   A standard position report. Related positions are:   Open Currency Position.   Capital & P&L.   C/A Nature.   B/S Difference.   Call.   Mismatch per Product Spot.   Mismatch per Product Forward.   The cumulative mismatch is calculated in the… …   International financial encyclopaedia

  • Mismatch limit —   Maximum allowed cumulative interest risk position/mismatch/gap …   International financial encyclopaedia

  • liquidity mismatch — or liquidity mismatch risk The expected amount of liquidity risk based on the mismatch between contractual amounts and dates for inflows and outflows. Also called funding gap, liquidity gap, or term liquidity risk. One of the three primary… …   Financial and business terms

  • interest rate risk — ( IRR) The potential that changes in market rates of interest will reduce earnings and/or capital. The risk that changes in prevailing interest rates will adversely affect assets, liabilities, capital, income, and/or expense at different times or …   Financial and business terms

  • term liquidity risk — See liquidity mismatch or liquidity mismatch risk …   Financial and business terms

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”