By the end of last year, the share of long-term mortgages had already crept up to around 45%. However, this move comes with two disadvantages. First, if banks use short-term funding but lend over the long term, they could run into difficulties as soon as interest rates rise again.
Longdated, mark-to-market assets would then lose value, while funding costs would mount on the liability side. In a nutshell, institutions would be exposed to heightened interest rate risk. Second, 2/7  BIS central bankers' speeches  since long-term interest rates are likewise very low at the moment, the effectiveness of this lever is very limited.