Limits to financing medium and long-term loans by short-term fund from the viewpoint of maturity mismatch

Abstract

This paper aims to analyze techniques frequently used to manage maturity mismatch between assets and liabilities which is an inherent risk in banking operations. Based on the anlysis, the author conducts evaluation to current regulations on limits to using short-term funds to finance medium and long-term loans which is the technique that the State Bank of Vietnam is adopting to supervise maturity mismatch. Consequently, suggestions to enhance the management efficiency of maturity mismatch in Vietnam are proposed