3 ms·

Were you deliberately using the "match the debt with the asset" rule of thumb as an example of your first sentence?

• appleiigs 10y ago
  No, matching debt to assets is proper finance theory and practice. I was referring to "don't use any debt" and "debt is manifestation of risk" and "With great power comes great responsibility" and "use debt for investments, not expenses".
  • piker 10y ago
    And for banks that borrow short and lend long? They're just ignorant of "proper finance theory and practice"? Or have they properly understood that the risks involved in credit transactions have a bit more nuance than your rule allows for?
    • appleiigs 10y ago
      Banks are definitely measured on Asset Liability Management by policy and regulations. Deviations from being matched would be an active choice, while being matched would be the default/starting point.