Asset transfer theory, referred to as transfer theory and also called conversion ability theory, is a theory about maintaining asset liquidity. This theory believes that the liquidity of a bank depends on the rapid liquidation ability of its assets. Therefore, The best way to keep your assets liquid is to hold convertible assets.

The asset transfer theory follows the proposition of commercial lending theory that banks should maintain a high degree of liquidity. At the same time, the asset transfer theory expands the scope of bank asset utilization, enriches the bank's asset structure, and breaks through the limitations of commercial loan theory on the use of short-term self-paying loans.

The shortcoming of the asset transfer theory is that it overemphasizes the use of convertible assets to maintain liquidity, which limits the use of banks' highly profitable assets. The liquidity of convertible assets will be damaged during periods of economic crisis or when there is little demand in the securities market, thus affecting the bank's liquidity and profitability.