how bank loans work, page-15

Hi there CW,

Regarding Asset and Liability Missmatches:

There is deposit-loan duration mismatch risk in most (all) bank balance sheets.

I am not sure that it is the “MAJOR weakness” you suggest. The quantum of risk is highly regulated with Banks formally reporting on ALM positions to APRA quarterly and subject to regular ad hoc surveillance.

Also the scenario that would cause the maximum grief is currently in progress (with steepening "normal" yield curves in Australia) and we are not seeing any "near death" experiences.

We could argue this one over a beer and agree to disagree!

Cheers