Banks don’t always follow basic financial principle.
At Bond University, where yours truly still studies and hopes to acquire his 5th degree, we learn about a basic financial principle. We call it the “matching principle”.
The matching principle is one of the fundamental backbone of a wide range of financial instruments and markets. The principle states that short term assets such as a working capital and inventories should be funded with short term liabilities. For example if a company is purchasing ...Continue Reading →