ADIs manage the mismatch between the preferences of depositors and borrowers.

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ADIs (Authorized Deposit-taking Institutions) facilitate the intermediation between depositors and borrowers. They collect funds from depositors and lend them to borrowers. However, depositors and borrowers may have different needs and preferences regarding the maturity, liquidity, and risk of the funds. ADIs manage this mismatch by offering a range of deposit and loan products with different features and by monitoring and balancing their asset and liability mix.

ADIs Manage the Mismatch Between the Preferences of Depositors and Borrowers