Term transformation risk

Risks that arise when banks finance exposures for longer periods with short-term deposits. This occurred in many cases in the course of the financial crisis that followed the subprime crisis. When the market for short-term funding collapsed, the affected institutions proved illiquid from one day to the next. – See banking rule, golden rule, Lehman bankruptcy, funding risk.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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