The market segmentation hypothesis explains the same phenomenon in terms of differences in supply and demand between segments of the capital markets. Some participants, such as banks, mainly borrow and lend short maturity securities. Others, such as pension funds, are major participants in the long-term portion of the yield curve. If more funds are available to borrow relative to demand in the short-term market than in the long-term market, short-term interest rates will be lower and long-term rates will be higher than predicted by both the expectations and liquidity preference hypothesis. The drawback to this perspective is that it does not explain very well the usual upward slope of the term structure, nor does it provide a good explanation for the levels of intermediate-term rates. In addition, the financial markets are not strictly segmented; many institutions issue and purchase both short-term and long-term securities.