Sediment theory

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The sediment theory is a theory that forms the conceptual basis for maturity transformation in credit institutions .


The sediment theory is one of the classic theories about refinancing risks for credit institutions. In his two-volume work “The Banks” (1854), Otto Hübner demanded complete congruence of deadlines with the golden banking rule . The aim of the maturity congruence is the total congruence of the deadlines for capital commitment and capital transfer of assets and liabilities in the balance sheet . Short-term loans are also refinanced by short-term deposits, and long-term loans are accordingly refinanced by long-term deposits . Hübner even strictly rejected a maturity transformation: "If the bank receives funds deposited for three months, it cannot safely borrow them for six months". Just three years later, Adolf Wagner partially moved away from this in his book “Contributions to Doctrine from the Banks”, published in 1857.


Wagner observed that there is a systematic difference between the formal and the material (actual) maturities of deposits at credit institutions. Formal terms and notice periods for savings deposits , for example, are those agreed between the bank and saver. After the end of the term or without exercising the option of termination, however, some of the deposits actually remain in the accounts and are not accessed. Not all deposits are canceled or withdrawn by the creditors at the same time (principle of prolongation ), while withdrawals are partially offset by deposits (principle of substitution ). The theory of probability applies to all deposits , whereby the account movements of individual depositors were viewed by Wagner as mutually independent random variables . The law of large numbers can be used in banking because banks have a very large number of mutually independent money-investing bank customers. The accumulation of many short-term deposits means that deposits and withdrawals are relatively steady and easy to predict. In normal times, bank customers do not withdraw all daily deposits at the same time and independently of one another, but rather a stable base balance remains through prolongations and substitutions - the dregs. In this way, the investors behave statistically independently of one another and thus cause the expected value (sediment) from the law of large numbers to be fulfilled . Payouts and deposits balance each other out in the event of normally distributed fluctuations, whereby a credit base is formed. This sediment is the residual amount that results as a positive difference between the formal and the actual maturities. The cash holdings of a credit institution must accordingly be above this fluctuation range, which goes beyond the deposit.

Maturity transformation

If this deposit is now borrowed congruently (congruently) for the formal term of the investment as a loan, the maturities are still congruent. Maturity transformation only begins when a bank actually lends the (formally) short or medium-term investment as a long-term loan and thus no longer maintains the same and converts it. The sediment theory takes into account the fact that deposits are at least partially available for longer than their nominal retention period.

One example is checking accounts , which usually hold funds longer than the one-day notice period for sight deposits . The part of the nominal short-term deposits that is not withdrawn immediately can be used as a base to refinance longer-term investments such as loans or securities.

Modifications to the theory

By Karl Knies the dregs theory was expanded in 1873 when he pointed out the importance of liquidity policy lending operations of banks in his of realization or Shiftability theory. Specifically, with the establishment of the Reichsbank in March 1875 , the banks were able to fall back on a further source of refinancing, so that the institutes no longer had to rely on deposits as their sole source. By rediscounting bills of exchange , the Reichsbank had provided the institutes with a source of central bank money that they could use to create liquidity by monetizing circulating assets such as bills of exchange .

The golden bank rule , sediment theory and the realization theory assume a permanent normal situation, as it is based on the normal distribution . With his extreme scenario of the maximum load theory in 1959, Wolfgang Stützel tried to take into account the sudden withdrawal of all bank deposits. According to his hypothesis , the insoles are neither extended nor substituted. The maximum burden now lies in the fact that all depositors also want to withdraw their credit when due. However, since the banks would have transformed deadlines in lending business on the basis of the dregs theory, they could only sell loans or other asset items before their maturity at a loss ( discount ) to cover their liquidity requirements . If the sum of these losses does not exceed the institutions' equity , the requirements of his maximum burden theory are met. According to this, the investment policy of a bank must “always be pursued in such a way that the risk of getting into a situation in which the solvency balance sheet no longer shows a surplus is excluded with a probability bordering on certainty”. Stützel has shown that the sediment theory is not applicable in times of crisis, especially when a bank run occurs.

Regulatory recognition

The sediment theory has been recognized by banking supervisory law since January 1962 in the earlier Principle II for German credit institutions and was adopted in the Liquidity Ordinance , which has been in force since January 2007 . According to Section 4 (1) LiqV, 10% of the customer deposits due daily and 10% of the savings deposits are also due daily (maturity band 1). Accordingly, 90% of this can be borrowed as medium or long-term loans beyond maturity band 1.

Individual evidence

  1. Otto Hübner, Die Banken , 1854, p. 28
  2. ^ Adolph Wagner, Contributions to Doctrine of Banks , 1857, pp. 162 ff.
  3. Heinrich Otruba / Gerhard Munduch / Alfred Stiassny, Macroeconomics , 1996, p 140
  4. Peter Betge, Bankbetriebslehre , 1996, p. 220
  5. Carl Knies, Das Geld - Presentation of the basic doctrines of money , 1873, p. 154 ff.
  6. Guido Ellenberger, Bankbetriebswirtschaftslehre , 2011, p. 166
  7. Wolfgang Stützel, Is the golden banking rule a suitable guideline for the business policy of credit institutions? in: Lectures for Sparkasse Auditors, DSGV (Ed.), 1959, p. 43