Register now or log in to join your professional community.
For a banker to use short-term deposit to finance long-term loans and make profit the bank must have a robust risk management framework that will take care of short-term financial obligations. This will help the bank from falling into liquidity problem and the risk of confidence in the market. However, the bank should only use this type of investment once in a while but not at all time since market fluctuations can always change the bottom line.