Calling Bullshit on Banking and "Maturity Transformation"

Ashwin Parmeshwaram elaborates on something that I have long suspected, viz., the conventional wisdom on "Maturity Transformation" is basically bullshit.
First, a definition

Why do banks exist? The conventional wisdom goes like this – depositors prefer to hold liquid risk-free assets and borrowers prefer to borrow for the long-term to invest in risky projects. Banks sit in the middle of this process and perform a sort of alchemy. By performing this alchemy, banks leave themselves open to the risk of bank runs – if all the depositors seek to withdraw their money at the same time, even a bank with otherwise sound loans as assets can go bust. This perceived risk of a bank run is why governments and central banks provide deposit insurance and liquidity facilities to the banking sector, a privilege that is not typically available to other financial intermediaries. In other words, banks exist for the purpose of maturity transformation.

Sounds nice and nifty, right?
But when you really get down and analyze these, most of these pretty much don't exist.  As Ashwin puts it

In the modern era, banks also provide a range of short-term lending options to consumers such as credit card loans. Again this is short-term debt that forms part of a well-diversified pool of loans. For well over a decade, these have been amongst the most easily securitised parts of a bank’s balance sheet. Again, although this is also technically maturity transformation it is typically not what most of us think as the primary purpose of maturity transformation.
What most people think of when they think of the role of banks is their role in providing long-term loans to businesses. The popular press is rife with the inability of banks to lend more to small and medium enterprises (SMEs) and how this is holding back economic growth. It is an obvious truth that banks make very few unsecured loans to SMEs on even a 3-5 year maturity, let alone a 30 year maturity. But does this matter? And did banks ever engage in such lending?

And then, of course, there are mortgages, right?

The most significant component of bank lending on such a long maturity in many countries is mortgage lending. Mortgage lending is undoubtedly an important part of the financial landscape. But very little of the maturity risk of mortgages actually stays with the originating banks. The interest rate risk is often hedged away with willing counterparties such as pension funds and life insurers and the credit risk is often securitised away.

Not to mention, when you really get down to it, nowadays banks won't even bother making a loan if they aren't absolutely certain that the FHA/Fannie/Freddie are going to underwrite it and/or take it over.
In short, Banks aren't really doing Maturity Transformation!
What they are doing is a spectacular job of being a Rentier, but that is a story for another day...