Financial Regulation
Intermediate
Liquidity Mismatch
A mismatch created when institutions fund longer-term or illiquid assets with short-term or demandable liabilities.
Why It Matters
Liquidity mismatch explains bank runs, repo runs, lender-of-last-resort policy, liquidity regulation, and the fragility of shadow banking.
Selected Literature
A short list of directly relevant archive entries.
1983
Introductory
Bank Runs, Deposit Insurance, and Liquidity
Douglas W. Diamond and Philip H. Dybvig
Journal of Political Economy
1991
Advanced
The Role of Demandable Debt in Structuring Optimal Banking Arrangements
Charles W. Calomiris and Charles M. Kahn
American Economic Review
2009
Advanced
Deciphering the Liquidity and Credit Crunch 2007-2008
Markus K. Brunnermeier
Journal of Economic Perspectives
2009
Advanced
Market Liquidity and Funding Liquidity
Markus K. Brunnermeier and Lasse Heje Pedersen
Review of Financial Studies
Related Cases
1996
Corporate Law
In re Caremark International Inc. Derivative Litigation
698 A.2d 959 (Del. Ch. 1996)
Director oversight duties, compliance systems, and board liability for failure to monitor legal risk.
1996
Financial Law
United States v. Winstar Corp.
518 U.S. 839 (1996)
Government contractual commitments made during thrift supervisory mergers and later regulatory change.
2013
Securities Regulation
Gabelli v. SEC
568 U.S. 442 (2013)
When the five-year limitations period begins for an SEC action seeking civil penalties for alleged fraud.
2019
Corporate Law
Marchand v. Barnhill
212 A.3d 805 (Del. 2019)
Board-level compliance systems and oversight of a risk central to the company's single-line business.