{
  "title": "Banks’ Maturity Transformation: Risk, Reward, and Policy",
  "publication": "IMF Working Papers, March 9, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683",
  "overlayPath": "/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683/index.md",
  "summary": "The aim of this paper is twofold: first, to study the determinants of banks’ net interest margin with a particular focus on the role of maturity transformation, using a new measure of maturity mismatch; second, to analyse the implications for banks from the relaxation of a binding prudential limit o",
  "sections": [
    {
      "heading": "Aim and scope",
      "content": "- Authors: Pierluigi Bologna\n- Publication date: March 9, 2018\n- Series: Working Paper No. 2018/045\n- Volume: 2018\n- Issue: 045\n- Pages: 32\n- DOI: https://doi.org/10.5089/9781484345184.001\n- ISBN: 9781484345184\n- ISSN: 1018-5941\n- Primary aims:\n  - To study the determinants of banks’ net interest margin with a particular focus on the role of maturity transformation, using a new measure of maturity mismatch.\n  - To analyse the implications for banks from the relaxation of a binding prudential limit on maturity mismatch, in place in Italy until mid-2000s."
    },
    {
      "heading": "Key findings",
      "content": "- Maturity transformation is a relevant driver of the net interest margin.\n- Higher maturity transformation is typically associated with higher net interest margin.\n- ‘Excessive’ maturity transformation—even without leading to systemic vulnerabilities—:\n  - increases banks’ interest rate risk exposure, and\n  - lowers their net interest margin."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject:\n  - Banking\n  - Commercial banks\n  - Credit risk\n  - Financial regulation and supervision\n  - Financial services\n  - Financial statements\n  - Market risk\n  - Public financial management (PFM)\n  - Short term interest rates\n  - Yield curve\n- Keywords:\n  - banks\n  - Credit risk\n  - Financial statements\n  - Global\n  - interest margin\n  - interest rate risk\n  - interest rates\n  - macroprudential\n  - Market risk\n  - maturity mismatch\n  - maturity transformation\n  - microprudential\n  - net interest margin\n  - net position\n  - profitability\n  - risk exposure\n  - Short term interest rates\n  - WP\n  - Yield curve"
    },
    {
      "heading": "Policy implications and analysis highlights",
      "content": "- The paper assesses trade-offs between profitability and risk stemming from maturity transformation:\n  - Maturity transformation can enhance net interest margin (reward).\n  - Excessive maturity transformation raises interest rate risk exposure and can reduce net interest margin (risk).\n- The relaxation of a binding prudential limit on maturity mismatch (as occurred in Italy until mid-2000s) is analysed for its implications on banks’ margins and risk exposures.\n\nIMF Working Paper — Pierluigi Bologna, \"Banks’ Maturity Transformation: Risk, Reward, and Policy\", Working Paper No. 2018/045.\n\n---\n\n Content in this bundle\n\n- Banks’ Maturity Transformation: Risk, Reward, and Policy, WP/18/45, March 2018\n  - Banks’ Maturity Transformation: Risk, Reward, and Policy, WP/18/45, March 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Banks’ Maturity Transformation: Risk, Reward, and Policy, WP/18/45, March 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683/bundle-manifest.json)",
    "Authors: Pierluigi Bologna",
    "Published: March 9, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484345184.001",
    "Authors: Pierluigi Bologna",
    "Publication date: March 9, 2018",
    "Series: Working Paper No. 2018/045",
    "Volume: 2018",
    "Issue: 045",
    "Pages: 32",
    "DOI: https://doi.org/10.5089/9781484345184.001",
    "ISBN: 9781484345184",
    "ISSN: 1018-5941",
    "Primary aims:",
    "Maturity transformation is a relevant driver of the net interest margin.",
    "Higher maturity transformation is typically associated with higher net interest margin.",
    "‘Excessive’ maturity transformation—even without leading to systemic vulnerabilities—:",
    "Subject:",
    "Keywords:",
    "The paper assesses trade-offs between profitability and risk stemming from maturity transformation:",
    "The relaxation of a binding prudential limit on maturity mismatch (as occurred in Italy until mid-2000s) is analysed for its implications on banks’ margins and risk exposures.",
    "**Banks’ Maturity Transformation: Risk, Reward, and Policy, WP/18/45, March 2018**"
  ],
  "related": [
    {
      "title": "Banks’ Maturity Transformation: Risk, Reward, and Policy, WP/18/45, March 2018",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2018/wp1845.pdf",
      "summary": {
        "path": "/-/media/files/publications/wp/2018/wp1845.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/wp/2018/wp1845.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683/index.md",
    "json": "/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683/index.json",
    "bundleManifest": "/en/publications/wp/issues/2018/03/09/banks-maturity-transformation-risk-reward-and-policy-45683/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-18T13:03:03.504Z"
}