Money Stuff – Mumbo-Jumbo

From June 16:

Banks take deposits (short-term loans from investors) and use them to fund long-term loans to companies, so everyone gets what they want; there is a whole apparatus of capital and prudential regulation to make sure that it mostly works out, and there are decades of theorizing about how it works and how it could work better and so forth. And there are various forms of shadow banking that also do this sort of “maturity transformation”: Investors make short-term investments, companies get long-term financing, and some mumbo-jumbo occurs in the middle to make everyone feel better about it.

Find Matt Levine at Bloomberg.