The risks of shifting into less liquid financial assets were made worse by the way in which those assets were funded. Conventional financial institutions increasingly relied on their access to short-term interbank markets to fund relatively long-term assets.
As a result, the average maturity on the liabilities side of the balance sheet was shortened, just as the average maturity on the assets side of the balance sheet was being lengthened. Borrowing short to lend long is, of course, fundamental to the business of banking.