Economics · Banking System
One recurring concern in the banking structure is maturity transformation, because banks typically accept short-term deposits while extending longer-term loans. This creates a structural concern primarily in the form of:
- 1excess capitalization in the banking system
- 2complete elimination of credit risk
- 3liquidity and interest-rate mismatch✓
- 4exchange rate depreciation
Correct answer
liquidity and interest-rate mismatch
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