interest rate risk and BS matching

three factors a.interest rate risk use balance sheet stress test b.maturity match - use maturity profile c.currency matching long position: foreign currency assets > foreign currency liabilities. short position: foreign currency liab > foreign currency assets many banks in emerging markets strategically run short foreign exchange positions as part of their overall asset-liability policy. This is particularly the case where domestic interest rates are high or in high inflation economies, and thus funding locally through eithe deposits or the interbank market is expensive compared with low interest rates in hard currency economies. So they fund through foreign currencies.