U.S.banks having positive maturity gap positions tend to do better when the yield curve is upward-sloping.

Question

Quizplus · Accepted Answer

When the yield curve is upward-sloping, long-term interest rates are higher than short-term interest rates, which means banks with positive maturity gap positions, meaning they have more long-term assets than liabilities, can earn more money from lending and investment activities. Therefore, they tend to do better in an upward-sloping yield curve environment.

USBanks Having Positive Maturity Gap Positions Tend to Do Better