This maturity mismatch measures both exchange rate risk and interest rate risk. At the onset of the global financial crisis in 2008, both the funding gap and the maturity mismatch of German banks were very large indeed.
How can we further build these to ensure that we can ride out any unforeseen bumps in the road? Well, my friends, like any good driver, we must keep our eyes on the road and follow the map that we have set out on. This brings me to the BSP’s policy thrust for 2008.