Filter by Categories
Accounting
Banking

Banking




Maturity Transformation


A type of transformation whereby a bank or any similar institutions takes advantage of the upward slope of the yield curve by investing in assets that have a longer duration than its liabilities (funding requirements). In other words, this involves the funding of long-term assets with short-term liabilities (where a bank makes long-term loans using funds that are borrowed at short-term interest rates).

In simple terms, maturity intermediation is a bank’s attempt to generate returns through maturity mismatches between assets and liabilities.



ABC
Banking is an integral part of the modern financial system and plays an important role in an economy. It basically involves the so-called intermediation (e.g., ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*