Learn what repricing risk means, how timing mismatches affect net interest
A repricing risk is the risk that interest-earning assets and interest-bearing liabilities reset to new rates on different schedules. When rates move, that timing mismatch can change a lender’s margin even if total assets and liabilities look balanced on paper.
A bank may fund long-term fixed-rate loans with short-term deposits or wholesale funding. If market rates rise and the funding reprices first, interest expense can jump before loan income catches up. The opposite mismatch can help earnings for a while, but it is still a form of rate exposure rather than a stable advantage.
This matters because repricing risk sits at the center of asset-liability management. It affects net interest income, earnings volatility, hedging decisions, and how management thinks about duration gaps, funding structure, and balance-sheet resilience.