trategies is to minimize to the extent feasible the impact of interest rate changes as the source of change in the margin.
In relation to interest rate-sensitive assets and liabilities, the Bank is positively-gapped, which means that the project increased in weighted average interest rates for both assets and liabilities cause net interest income to experience a projected increase from 2003 to 2004. Suggested on-balance sheet strategies to minimize the effect of interest rate changes on the increased monetary value of the interest rate margin from 2003 to 2004 are presented in the following discussions.
On the liability side of the balance sheet, there is little incentive to implement a strategy that would narrow the interest margin by increasing costs for the Bank. More effective strategies in the context of the environment and situation which the Bank confronts will deal with manipulation of interest rate-sensitive assets.
On the asset side of the Bank's balance sheet, the higher-interest assets are fixed-rate loans and floating-rate loans. The weighted average interest rates on these two loan classes are so close (5.83 percent and 5.81 percent) that seeking redist
...