Financial institutions prior to the crisis had been in what might be described as an asset-driven world. Banks grew their asset portfolio on the assumption (which was generally realised) that the funding required would be easily forthcoming to support the asset growth. To paraphrase Field of Dreams, the financial environment was ‘if you lend it, they will fund’.
That environment has been turned on its head by the financial crisis. Financial institutions are now in a funding-driven world. They can no longer assume that the funding will be readily forthcoming at a given price. We are now much more in a liability-driven world. So the structure and maturity profile of liabilities does bear close analysis.