What is the corresponding book?

The book is a situation where the bank or other type of financial institution has a fair division or agreement between the due date of its assets and its obligations. The institution currently engaged in a book is sometimes referred to as asset management/commitment, is considered to be a financially stable and good risk. This type of balance is a strong indicator that the institution carries a lower risk of failure and that any default settings that are taking place are unlikely to have more than the minimum impact on the overall creditor's stability.

Investors often look closely at the relationship between assets and liabilities in considering the possibility of investing in a financial institution or even buying securities offered institutions. The aim is to find out whether the balance between the maturity of the obligations and the assets is organized in a way that helps ensure that the permanent ability of the institution works. It should correspond to the book situation of ions and institutions have a strong history that it would constantly remain profitable, inveStor is likely to consider the risk of minimal compared to potential revenues.

Financial institutions seek to maintain a corresponding book in your risk management strategies. When creating this type of balance between the maturity of liabilities and assets, some economic clients may be more difficult, efforts can significantly change how well a bank or similar institution during a recession or a period of economic depression. This is because the costs that are created as part of the loan process are compensated by collecting interest from already active. The final result is that the qualification of these loans so that the potential for the default settings is minimized, the bank is able to withstand and eventually appear at the end of the economic crisis in the relatively stable condition.

In an effort to create a corresponding book, institutions must comply with government regulations regarding the creation of contractual agreements, interest ratesthat can be charged from loans and any types of fees or fees that apply to services offered by customers in general. To some extent, the remaining in fact is in fact a useful process of achieving a corresponding book, because these regulations apply to all competing banks and financial institutions. Consistency also tends to create a reciprocal effect if these regulations are designed to protect the interests of consumers, creditors and economics in general.