this newly acquired UST bond was financed with some liability of the bank

this newly acquired UST bond was financed with some liability of the bank

let's say the bank itself issued bonds with a smaller coupon than UST’s

thus, the bank used a liability to finance and asset and earns a spread

Illya Gerasymchuk 2025-08-13 00:00

a bank may buy a US Treasury bond (UST) and hold it as an asset. at some point, that bond matures, thus terminating its existence