FIs are better able to manage the risk of mismatching maturities of assets and liabilities than household savers.

Question

Quizplus · Accepted Answer

Financial institutions have access to a wider range of funding sources, such as short-term deposits and long-term bonds, which can help them match the maturities of their assets and liabilities more effectively. In contrast, individual households may have limited options and may face challenges in managing the timing of their savings and expenditures.

FIs Are Better Able to Manage the Risk of Mismatching