creased if banks are not careful and prudent in assessing their borrowers.
             Over time, the banking industry has been gradually liberalised, with greater freedom of entry, a greater number of instruments on which to make money and with which to compete for depositors' funds, and a greater number of financial institutions. This leads to a higher level of competition, and provides incentive for bankers' to take greater risks with their deposits, in search of greater returns. This leads to banks making loans to higher risk customers, which results in a higher chance that these loans will become 'bad' and the money not be returned.
             Bankers need to carefully balance their assets and liabilities to ensure that they are of a similar nature and are spread over a similar time period. An imbalance of the two can lead to insolvency, or illiquidity.
             One such imbalance that can cause problems within a bank is a mismatch on the maturity dates of its liabilities and its assets. Liabilities will almost always be on a shorter-term basis, but banks should seek to balance the number of current accounts compared to longer-term savings accounts, and the number of short-term loans such as overdrafts and credit cards with the number of long-term loans such as mortgages.
             Also, if a bank has the majority of its liabilities (deposits) in one currency, and holds a greater number of its assets in another currency, a significant appreciation of one currency against the other can instantly lower the value of a banks' assets against the value of its liabilities, making it technically insolvent.
             Another way in which a banks assets can effectively be devalued is through interest rate chan
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