Friday, January 29, 2010

Fed Warning To Banks......

....Watch your Duration Matches.

http://www.reuters.com/article/idUSTRE60S34H20100129

The Fed states that rates are low but won't stay that way forever. So much for banks need to lend more. Its disingenuous for the government to tell the banks to lend more when they know that borrowing short and then lending long is in itself inherently risky. When rates head up banks cant turn over their funding.

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