7-3 An FI is short-funded when the maturity of its liabilities is less than the maturity of its assets.

Name: 7-3 An FI is short-funded when the maturity of its liabilities is less than the maturity of its assets.
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Short-funding occurs when an FI's liabilities come due before its assets, putting it at risk of being unable to meet its obligations. This is why FIs typically try to match the maturities of their assets and liabilities as closely as possible.

7-3 an FI Is Short-Funded When the Maturity of Its