Maturity transformation
By maturity transformation ( English maturity transformation ) are on the financial market , the different maturity interests of debtors ( individuals , companies , government ) and creditors (eg. As savers ) reconciled.
General
The term transformation (also term extension function ) is one of three economic functions of credit institutions . In addition, they also fulfill the batch size and risk transformation . In terms of maturity transformation, the institutions' task is to convert formally accepted short-term investments into long-term loans. That is one of the essential tasks of the banking system. This conversion of formally short-term investments to long-term loans is only possible within the framework of their empirical values from the deposit and withdrawal habits of their investors. With prolongations, the depositors in fact leave their funds with the banks longer than legally agreed; with substitutions, withdrawn funds are replaced with new investments; this is the core of the sediment theory , which only applies to trouble-free markets. The concept of maturity transformation is based on the idea of banks as financial intermediaries who pass on savings deposits to borrowers. This theory is now also explicitly no longer supported by the Deutsche Bundesbank . Instead, the Deutsche Bundesbank declares bank loans to be the creation of deposit money , for which no savings are required.
species
There are two types of maturity transformation:
- Transformation of capital commitment periods (liquidity period transformation)
- The commitment period of the capital made available differs from the commitment period of the invested capital. Liquidity risks arise from the transformation of liquidity maturities .
- Transformation of fixed interest periods
- The duration for which the interest on the capital made available is fixed differs from the duration of the fixed interest rate on the invested capital. This creates interest rate risks .
If long-term investments are financed with short-term funds, one speaks of positive maturity transformation , and conversely of negative maturity transformation . The normal case is the positive maturity transformation.
Banking impact
The maturity transformation has been recognized by banking supervisory law since January 1962 in the former Principle II for German credit institutions and has been adopted in the Liquidity Ordinance that 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.
Due to the maturity transformation, the banks are exposed to a refinancing risk. If a bank has a credit rating , this refinancing risk is not reflected as a liquidity risk, but as an interest rate risk. In perfect , arbitrage-free markets, no profits can be made from maturity transformation. Because with a normal yield curve , the short-term interest rates are lower than the long-term. However, the long-term rate will only be higher than the short-term if the market expects short-term rates to rise. With a normal interest rate structure, a maturity-transforming bank would buy current maturity structure profits with future maturity structure losses and vice versa and would have to shift a given profit intertemporally. The maturity transformation can therefore be a source of income for banks with a favorable interest rate constellation. The resulting component of the result is often referred to as a structural or transformation contribution .
The risks arising from maturity transformation at financial intermediaries were e.g. B. in the crisis of the American savings banks in the 1980s and in the financial crisis from 2007 onwards .
Individual evidence
- ↑ a b Johannes Jaenicke, An empirical study on the price policy of the banks with special consideration of federal bank policy measures , 2003, p. 4.
- ↑ Peter Betge, Bankbetriebslehre , 1996, p. 14.
- ↑ Money and Monetary Policy, School Book for Secondary School II. (PDF, 6.91 MB) 2014, p. 76 , accessed on April 21, 2017 .
- ↑ Axel Engelhardt, financial intermediation and key currencies , 2001, p. 150 (FN 307)
- ↑ Egon Görgens / Karlheinz Ruckriegel / Franz Seitz, European monetary policy , 1999, p 61st
- ↑ Thomas Hartmann-Wendels / Andreas Pfingsten / Martin Weber, Bankbetriebslehre , 2nd edition, 2000, p. 648 ff.
