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Keeping it Simple | Ep. 24: We Don’t Need No Stinkin’ CFOs.

Keeping it Simple with Simplify Asset Management

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The Instability of the Liability Structure

A lot of these banks are like, well, my deposit beta is pretty low and my deposits are sticky. So if interest rates go up, I'm able to originate loans wider, my floating rate portfolio is paying more money. And so why do I have to have a hedge that doubles up how much money I make if that? It's these nonlinearities, which really is a function of the piecing at which the market move because the front end moves so, so much. But it's really not that it's really the instability of the liability structure that has driven this.

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