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the market ... thereby helpspreventmaturity mismatches
to support the securitisation process of mortgagescreatinga maturity mismatch
Thus as you might see in figure 9d term transformation was strongly encouraged by disincentives in that regimeleadingto maturity mismatch
What kind of discoordinationcausesmaturity mismatch
A lawpreventingmaturity mismatching
Rule 1preventsmaturity mismatching
Not enough cash on handmight causea maturity mismatch
Time lag between lending and borrowing of the commercial bankshas leadeda maturity mismatch
mainly borrowing short and lending longcreatinga maturity mismatch
The problem ... assetscreatesthe maturity mismatch
leveraged financing(passive) caused bythe maturity mismatch
leveraged financing(passive) caused bythe maturity mismatch
to finance longer - term assetscreatingmaturity mismatches
an appetite for longer maturity assets thereby helpingpreventmaturity mismatches
Redemption featurecausesfundamental maturity mismatch
orderto preventmaturity mismatches
the loans ... two to three yearsmay ... createa maturity mismatch
to freeze these resources for 5 yearscreatinga clear maturity mismatch
A condition as suchmight causematurity mismatch
when a loan is extended for a longer period than the financing is contracted for(passive) is createdMaturity mismatch
alternatively finance long - term projects with short term loanscreatingmaturity - mismatches
But in reality , they are ‘ loaned out ’ to borrowers ,creatinga maturity mismatch
liquidity riskresultingfrom maturity mismatch
increased the interest rates for loans with shorter maturity termscreatingmaturity mismatches
The reliance on short - term debt while lending to fund long - term infrastructure projectscreateda maturity mismatch
liberalization policies ... strengthened prudential regulationto preventmaturity mismatches
The assets backing the ABCP ... long - term in natureleadsto maturity mismatch
a lack of ( a ) term resources , ( b ) adequate collateral , and ( c ) access to housing finance for those with lower incomes(passive) caused bya maturity mismatch
overnight funding at a government - collateralized rate(passive) created bythe maturity mismatch
Financing in the repo marketcreatesa maturity mismatch
Financial institutions and firms in soft currency economies face what Pedro Pou , president of the Central Bank of Argentina , has called the “ devil ’s choice ” : they must choose between borrowing short - term in their own currency domestically ,thus creatinga maturity mismatch
short - term funding(passive) created bymaturity mismatch
their predominantly short - term deposits(passive) created bythe maturity mismatch
If long - term finance is not available from banks ( as is quite often the case ) and bond markets do not exist , firms may have to finance the acquisition of long - term assets by incurring short - term debtthereby creatinga maturity mismatch
Nasiruddin Ahmed 's depositscreatinga maturity mismatch
a factcreatesa maturity mismatch
to finance long - term lendingthus creatinga maturity mismatch
Max Bruche - Cass Business School ; Anatoli Segura - Bank of Italy Commercial paper has been usedto createsubstantial maturity mismatch
This capital , however , has been spent on longer term infrastructure projectscreatinga maturity mismatch
long - term investments with short - term bank depositscreatinga maturity mismatch
liquidity risk exposure(passive) gets created byliquidity risk exposure
both interest rate and liquidity risk exposurescreatesboth interest rate and liquidity risk exposures
varying degrees of interest rate risk and liquidity riskcreatesvarying degrees of interest rate risk and liquidity risk
a fundamental risk for bankscreatesa fundamental risk for banks
the banks ’ liquidity to tighten and limited their ability to disburse fresh loans to customerscausedthe banks ’ liquidity to tighten and limited their ability to disburse fresh loans to customers
to liquidity risk the banks relied on shorter term lending such as repurchase agreements these agreements created short - term funds that would then need to be paid back laterleadsto liquidity risk the banks relied on shorter term lending such as repurchase agreements these agreements created short - term funds that would then need to be paid back later
to a breakdown of markets once “ the fuse was set on fireledto a breakdown of markets once “ the fuse was set on fire
the risk that you ca n't roll over the liabilities ( bank runscreatesthe risk that you ca n't roll over the liabilities ( bank runs
a more serious systemic risk ... since currency mismatches invariably accompany themcreatea more serious systemic risk ... since currency mismatches invariably accompany them
a more serious systemic risk since they are invariably accompanied by currency mismatchescreatea more serious systemic risk since they are invariably accompanied by currency mismatches
to bank runs if every depositor asks to be repaid in 1 yearcan leadto bank runs if every depositor asks to be repaid in 1 year
the risk of a disorderly bank run which can be exacerbated by imperfect information about the value of bank assetscreatesthe risk of a disorderly bank run which can be exacerbated by imperfect information about the value of bank assets
the Shortage of LiquidityCausesthe Shortage of Liquidity
another vulnerabilityalso createdanother vulnerability
from the banks ' growing housing loan portfolioresultingfrom the banks ' growing housing loan portfolio
severe liquidity problems for financial institutionscan also createsevere liquidity problems for financial institutions
towards the tendency of falling long - term interest ratesleadingtowards the tendency of falling long - term interest rates
inflation and volatilitycreatesinflation and volatility
to volatile exchange - ratesleadto volatile exchange - rates
most financial crises(passive) are triggered bymost financial crises
to error if the yield curve is not flat and the benchmark security changes over time , leading to inconsistencyleadsto error if the yield curve is not flat and the benchmark security changes over time , leading to inconsistency
intertemporal discoordinationcausesintertemporal discoordination
us to an even more twisted situation where each deposit holder feels he holds some " current wealth " in the form of " moneyleadsus to an even more twisted situation where each deposit holder feels he holds some " current wealth " in the form of " money
alsocan ... leadalso
to losses on the legacy portfolio Sunk costsleadsto losses on the legacy portfolio Sunk costs
from borrowing medium butresultingfrom borrowing medium but
currency depreciation Bank balance sheets were badly hit Caused a lack of cash and an inability for banks to repay investors Insolvency 10 3causescurrency depreciation Bank balance sheets were badly hit Caused a lack of cash and an inability for banks to repay investors Insolvency 10 3
out in BIPRU 9.5.6 R - BIPRU 9.5.8 Rsetout in BIPRU 9.5.6 R - BIPRU 9.5.8 R
fragilitycausesfragility
wild swings in forex reservescausingwild swings in forex reserves
to the 2007–08 crisisleadingto the 2007–08 crisis
to potential risks in liquidity and re - investmentsmay ... leadto potential risks in liquidity and re - investments
made countries such as Koreacreatedmade countries such as Korea