We are aware that bankers, as well as examiners, may become overly conservative in an attempt to ameliorate past weaknesses in lending practices, and are working to emphasize that it is in all parties’ best interests to continue making loans to creditworthy borrowers.
With this in mind, I would like to mention a very interesting approach to the liquidity risk. 12 Without a doubt, when the financial crisis is viewed as a liquidity crisis, the root cause is the excessive maturity mismatch on the balance sheets of funds and the like.