BK4 - Topics in Commercial Bank Management Lecture FOUR...

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MANA130107 Bank Management 1 Lecture FOUR Assets-Liability Management (chap 7-8 ) Topics in Commercial Bank Management MANA130107 Bank Management 2 Assets-Liability Management Topics covered in this lecture Interest-Sensitive Gap Management Duration Gap Management Derivatives in Assets-Liability Management MANA130107 Bank Management 3 Interest-Sensitive Gap Management Interest-sensitive gap management Analysis and match the volume of repriceable assets and liabilities during the same time period Dollar Interest-Sensitive Gap = Interest-Sensitive Assets – Interest Sensitive Liabilities Asset-Sensitive Banks Positive dollar interest-sensitive gap Benefit from interest increase and suffer from falling interest rate Liability Sensitive Banks Negative dollar interest-sensitive gap Benefit from interest decrease and suffer from rising interest rate
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