What is a 'Negative Gap'
A negative gap is a situation where a bank's interestsensitive liabilities exceed its interestsensitive assets. A negative gap is not necessarily a bad thing, because if interest rates decline, the bank's liabilities would get repriced at lower interest rates and income would increase. However, if interest rates increase, liabilities would get repriced at higher rates and income would decrease.
The opposite of a negative gap is a positive gap, where a bank's interestsensitive assets exceed its interestsensitive liabilities.
BREAKING DOWN 'Negative Gap'
Gap analysis offers a simplified way to determine a bank's interestrate risk as it relates to repricing â€“ the change in interest rate when an interestsensitive investment matures. The size of a bank's gap indicates how much of an impact interestrate changes will have on a bank's net interest income.

Repricing Opportunity
The change in interest rate of an interestsensitive asset or ... 
Pooled Cost Of Funds
A formula for finding the cost of funds. The pooled cost of funds ... 
Interest Rate Gap
The difference between fixed rate liabilities and fixed rate ... 
Net Interest Income
The difference between the revenue that is generated from a bank's ... 
Gapping
In general, a trading strategy in which the participant borrows ... 
Common Gap
A price gap found on a price chart for an asset. These gaps are ...

Trading Strategies
Know How To Manage Gaps On Your Trading Strategy
Gaps generate profitable strategies right after they print, as well as during retracements that test those levels, often months or years later. 
Chart Advisor
Are Fertilizer Stocks Losing Their Stink?
Traders will keep an eye on the various fertilizer stocks because they could be getting ready to make a move toward various key gaps that are shown on the charts. 
Stock Analysis
Watch A Bank's Liabilities
The Federal Reserve will eventually raise interest rates, raising the cost of funds for many banks. 
Stock Analysis
How to Fade Morning Gaps
Stocks that are in the news and the market indices themselves often gap up or down in the morning, creating good trading opportunities, and Scott Andrews presents charts and real examples of ... 
Trading Strategies
Gap Strategies To Try For Intraday Trades
Many traders lack effective strategies to manage gaps, whether they pop up on open positions or mark the first play of the day. These strategies may help. 
Investing News
Should Investors Squeeze Into The Gap?
The Gap is closing stores and conducting layoffs. Will investor panic lead to opportunity? 
Trading Strategies
Analyzing The Market With Trend Mirrors
Past price action can exert a powerful influence on current rallies and selloffs. 
Investing News
Gap Inc. Down 11% After Disappointing April Sales (GPS)
Gap Inc. has fallen 11% after news that its April and Q1 sales are much weaker than expected. 
Stock Analysis
How Gap Plans to get Back in Style (GPS)
Gap is currently out of style. Here's how it plans to change that. 
Economics
Understanding Total Liabilities
Total liabilities are the combined debts an individual or company owes.

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