Business and Personal Finance Dictionary

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• 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.
  
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