Change Quote by Janet Yellen
“Maturity transformation is a central part of the economic function of banks and many other types of financial intermediaries.”
About This Quote
Source Speech: Remarks on Financial Stability, US Treasury, 2022
Banks convert short‑term deposits into long‑term loans, supporting economic activity while managing risk.
In simple terms: Banks turn short money into long loans.
Balance risk and liquidity.
Themes
Mood
Type
When to use this quote
- lending
- investment
- policy making
- regulatory oversight
Key Concepts
Questions to Reflect On
- How do banks ensure liquidity?
- What safeguards prevent crises?
Risk of liquidity mismatch if not managed.