Comment: Yep ...

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Yep ...

... there is a concept in banking called "matching maturities" or "mismatching maturities."

If you put money into a bank and agree to keep it there for a specific period of time, say 5 years like in a Certificate of Deposit, then the bank pays you a certain interest rate. If that bank then lends that money out for the same period of time, say for a 5-year car loan, then they have matched maturities because the car loan will be paid off about the same time that you are due your money. The bank has liquidity because they only pay you interest each year and principal at the end, while they collect principal and interest each month on the car loan.

However, if the bank lends the money out for 30 years on a home mortgage, then they have mismatched maturities and the bank is not liquid. This is one of the big differences between a sound banking system and one that is geared to self-destruction by too aggressive lending or leveraging.