Market maker and Maturity mismatch: Difference between pages

Revision as of 07:44, 14 August 2016

The structural risk accepted by banks when undertaking maturity transformation.

Banks' liabilities generally have much shorter contractual maturities than their assets.

This maturity mismatch is a source of liquidity risk.

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-Market makers in an asset quote simultaneous bid prices and offer prices to the market, at which they are willing to deal with the market to buy the asset (at the bid price) or sell the asset (at the offer price).
+The structural risk accepted by banks when undertaking maturity transformation.
+Banks' liabilities generally have much shorter contractual maturities than their assets.
+This maturity mismatch is a source of liquidity risk.
 == See also ==
-* [[Bid-offer price]]
+* [[Bank]]
-* [[Market price]]
+* [[Liquidity]]
-* [[NMS]]
+* [[Liquidity risk]]
-* [[Turn]]
+* [[Maturity]]
+* [[Maturity transformation]]
+* [[Riding the yield curve]]
+* [[Run]]