  This study investigates the functioning of modern payment systems through the
lens of banks' maturity mismatch practices, and it examines the effects of
banks' refusal to roll over short-term interbank liabilities on financial
stability. Within an agent-based stock-flow consistent framework, banks can
engage in two segments of the interbank market that differ in maturity,
overnight and term. We compare two interbank matching scenarios to assess how
bank-specific maturity targets, dependent on the dictates of the Net Stable
Funding Ratio, impact the dynamics of the interbank market and the
effectiveness of conventional monetary policies. The findings reveal that
maturity misalignment between deficit and surplus banks compromises the
interbank market's efficiency and increases reliance on the central bank's
standing facilities. Monetary policy interest-rate steering practices also
become less effective. The study also uncovers a dual stability-based
configuration in the banking sector, resembling the segmented European
interbank structure. This paper suggests that heterogeneous maturity mismatches
between surplus and deficit banks may result in asymmetric funding frictions
that might precede credit- and sovereign-risk explanations of interbank
tensions. Also, a combined examination of macroprudential tools and
rollover-based interbank dynamics can enhance our understanding of how
regulatory changes impact the stability of heterogeneous banking sectors.
