And that logic seems to point to changing the maturity of the assets on the Fed's balance sheet.
The money the insurers collected, however, was not properly "matched"—the life of the average policy was longer than the maturity of the assets in which the insurers invested.
As the first chart shows, inflows into Yu'E Bao are now moving in the opposite direction to the maturity of its assets, hardly the kind of trend that a fund wants to see.Jack Ma, the founder of Alibaba, vowed last year to disrupt the banking sector by pushing into Internet finance.
Unless equity markets roar back, the pension funds will face a big gap between the maturity of their assets and the maturity of their liabilities.
Contrary to the conventional wisdom on rising interest rates, Malpass observes, "[This sector] stands to benefit from higher interest rates due to the generally short maturity of its assets versus the long maturity of its debts".
Each time the portfolio is altered because of the payment of coupons or the maturity of an asset, we must rebalance the portfolio by buying new assets to bring the duration into line with that advised by our strategy (i.e., the time until the end of the investment horizon (pm hbox {K}), depending on the prediction).
To minimize risk, the maturity and yield of assets and liabilities should generally match.
The IMF and the Financial Stability Board, a global club of regulators, want to know more about the mismatch of the maturities of banks' assets and liabilities, the connections between banks and the rest of the financial system, and non-bank financial firms, just for starters.Testing times aheadThe first test of central banks' macroprudential prowess may already be upon them.
Managing that risk is what banks do: by holding a risky balance-sheet they allow households and firms to have safe ones.Since the maturities of their assets and liabilities do not match up, banks tend to give themselves some margin for error.
be a stopping time describing the maturity of the risky asset.
