Gap Management enables banks to monitor and manage interest rate risks from transactions so they can make strategic decisions with regard to gap positions for defined points in time. Liquidity analysis and the cash flow evaluation enable banks to manage their liquidity requirements and NPV risks.
In contrast to NPV analysis, where risks are recorded using NPVs and future values, in gap management, the position and maturity volumes as well as cash flows and liquidities are displayed on key dates or for periods.