Liability Management

Banks are, by nature, conservative. They want to keep an even keel. Most of the time. Sometimes, of course, they get as wild as a bachelorette party in Vegas...we’re looking at you, 2007-2008. But let's just agree to the general premise that, most of the time, banks are stereotypically pretty...button-down.

As banks generally look to keep risk under control, they purposely create a mix in their assets and debt obligations, so they have a safe amount of diversification.

This practice is known as liability management. It involves keeping a mix of maturities and products when they make loans or other investments.