> Daily reminder that bank runs wouldn't be a thing if we did duration matching, forbidding banks from borrowing short and lending long.

If we really want to prevent bank runs, shouldn't we just forbid lending?

Snark aside, transforming duration is a big part of the value that banks add. In general, there's a lot of demand for lending short and borrowing long. Banks add value (and risk) by taking the opposite side of those trades. I'd rather have banks that suffer occasional runs (which really aren't that common at this point) than banks that don't transform duration