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“Maturity transformation is a central part of the economic function of banks and many other types of financial intermediaries.” quote by Janet Yellen
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“Maturity transformation is a central part of the economic function of banks and many other types of financial intermediaries.”

Janet Yellen

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.

Key Takeaway

Balance risk and liquidity.

Themes

finance banking risk management

Mood

analytical serious

Type

educational informative

When to use this quote

  • lending
  • investment
  • policy making
  • regulatory oversight

Key Concepts

maturity transformation intermediation financial stability

Questions to Reflect On

  • How do banks ensure liquidity?
  • What safeguards prevent crises?
A Different Perspective

Risk of liquidity mismatch if not managed.

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