amount by which interest sensitive assets differ from interest sensitive liabilities for a designated time period, for example, the net difference between loans and deposits maturing in one year or less. An excess of liabilities over assets means there are more liabilities than interest earning assets, resulting in a negative gap. The opposite, an excess of interest earning assets compared to deposits, is a positive gap.
amount of a financing need for which provision has yet to be made.
Finance: amount of a financing need for which provision has yet to be made. For example, ABC company might need $1.5 million to purchase and equip a new plant facility. It arranges a mortgage loan of $700,000, secures equipment financing of $400,000, and obtains new equity of $150,000. That leaves a gap of $250,000 for which it seeks gap financing. Such financing may be available from state and local governments concerned with promoting economic development.
Securities: securities industry term used to describe the price movement of a stock or commodity when one day's trading range for the stock or commodity does not overlap the next day's, causing a range, or gap, in which no trade has occurred. This usually takes place because of some extraordinary positive or negative news about the company or commodity. See chart on next page. See also price gap.
