Gap = interest rate sensitive assets-interest rate sensitive liabilities; Bank income change = gap * interest rate change range; Gap analysis is a method to measure the impact of interest rate changes on the current earnings of banks. Gap analysis is a method to measure the impact of interest rate changes on the current earnings of banks. Specifically, it is to divide all interest-bearing assets and interest-bearing liabilities of banks into different time periods according to the repricing cycle.

In each time period, deducting interest-sensitive liabilities from interest-sensitive assets and adding off-balance-sheet business positions will get the repricing "gap" in that time period. Multiply the gap by the assumed interest rate change to get the approximate impact of this interest rate change on the change of net interest income. When liabilities exceed assets in a certain period of time, there will be a negative gap, that is, debt-sensitive gap.

Duration analysis, also known as duration analysis or term elasticity analysis, is a method to measure the impact of interest rate changes on the economic value of banks. Specifically, it is to give the corresponding sensitivity weight to the gap in each period to get the weighted gap, and then summarize the weighted gap in each period to estimate the possible impact of a given small (usually less than 1%) interest rate change on the bank's economic value.