Because savings institutions commonly use long-term liabilities to finance short-term assets, they depend on additional deposits to accommodate withdrawal requests.

Question

Quizplus · Accepted Answer

Savings institutions typically use short-term liabilities (like deposits) to finance long-term assets (like mortgages), which can create liquidity risks if many depositors withdraw their funds simultaneously.

Because Savings Institutions Commonly Use Long-Term Liabilities to Finance Short-Term