Banks are, by nature, conservative. They want to keep an even keel. Most of the time. Sometimes, of course, they get as wild as a bachelorette party in Vegas...we’re looking at you, 2007-2008. But let's just agree to the general premise that, most of the time, banks are stereotypically pretty...button-down.
As banks generally look to keep risk under control, they purposely create a mix in their assets and debt obligations, so they have a safe amount of diversification.
This practice is known as liability management. It involves keeping a mix of maturities and products when they make loans or other investments.
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Finance: What is liability?3 Views
Finance allah shmoop What is a liability What is it
it's what you owe you bought four million gumballs on
credit for your party pack for the parade the money
is owed to gumballs are us in ninety days that's
a short term liability Alright next example you borrowed eighty
three million dollars to set up your new do dental
drive through service and that money is due in twelve
years at seven percent interest a year that's A long
term liability Why long term Because it comes due in
over a year and that's basically it liability comes in
two flavors short and long term and it's one of
the key elements of the balance sheet as it lives
in this space ride over here So yeah that's a
liability all this crap time now considering how many gumballs
you've consumed in the past month you really should get
yourself to a good drive through dentist or maybe sleep 00:00:56.998 --> [endTime] in mr
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