DYNAMIC GAP ANALYSIS

dynamic gap analysis: translation

Gap analysis methodologies that include assumed volumes for renewals, rollovers, replacement business, growth, etc., to reflect the fact that banks do not close their doors and simply honor remaining outstanding obligations as of the date on which gap reports are prepared. Dynamic gap analysis attempts to reflect the reality that on an ongoing basis loan payments and maturities are replaced with new loans; deposit withdrawals are replaced by new deposits.

The opposite of static gap analysis. American Banker Glossary