Matched Maturities

Matched Maturities - Matched Maturities is the funding of loans with deposits approximately equal durations to minimize interest rate risk. This is the treaty gap approach to funds management, carried out by matching maturities on opposite sides of the balance sheet in a given reporting period. All ninety-day loans matched against liabilities expected to mature or re-priced in ninety days. The disparity between maturing assets and maturing liabilities is the contractual gap, which will be different for each calendar period. Matched funds get more difficult as maturities lengthen. A bank could try to fund its five-year car loans with five-year Certificates of Deposit.