Under supposedly extreme circumstances (that the experience of Northern Rock suggests may not be that extreme), the maturity mismatch may even imply the risk of a bank run. This  4  Brunnermeier, M.K. and L.H. Pedersen, “Market liquidity and funding liquidity”, forthcoming in Review of Financial Studies.
BIS Review 43/2008  3  may happen if large numbers of depositors perceive liquidity conditions (or solvency, for that matter) at a specific institution as untenable and rush to withdraw their deposits in waves. Several mechanisms and policies have been developed over time for prevention and resolution of bank runs.