The neo-Austrians have (re-)discovered it:
Even if we accept the case for a 100 percent reserve requirement, we see that the maturity mismatching of liabilities and assets (borrowing short and lending long) is itself perilous—and in the same sense that fractional reserves are perilous.
The matter also now seems understood in high places:
On the liquidity front, there are a host of initiatives underway. The Basel Committee on Banking Supervision is working on establishing international standards for liquidity requirements. There are two parts to this. … The second is a liquidity standard that limits the degree of permissible maturity transformation—that is, the amount of short-term borrowing allowed to be used in the funding of long-term illiquid assets. Under these standards, a firm’s holdings of illiquid long-term assets would need to be funded mainly by equity or long-term debt.
Yeah, good luck with that, guys. I hope those 57% mortgage-interest rates don’t cramp your style. Can I offer you any pitons to go with that yield curve?