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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
by 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 agoAnd 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 agoBanks 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.