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Commodities Briefing - Categorized | Financial, Trading more

Financial intermediation and shadow banking through commodities

Posted on 29 April 2014

Commodity trading firms are not systemically risky because they do not engage in the sort of maturity transformation that banks do. They also tend mostly to operate on a hedged basis, via “basis trade” exposure.
Short-term assets meanwhile are funded with short-term debt while long-term assets are funded with long-term debt, meaning the institutions are not heavily leveraged at all, though balance sheets are exposed to liquidity or rollover risk………………………………………..Full Article: Source


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VRS - who has written 38144 posts on Opalesque Commodities Briefing.


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