Do You Have a Liability Mismatch?

There's always a maturity mismatch. So again, we'll go back to our first example where we have a company that exists in Europe that wants to transact with Malaysia and needs dollars. Where do they get those dollars from? Well, the company in Europe contacts its local bank. The local bank probably doesn't have dollars, but it knows a dealer who does. It's going to lend this corporation these dollars that it borrows in short-term markets. Nothing more complicated than that. But if you have a disruption in those short- term markets, then you have liability mismatch on the local bank's balance sheet.