THE Monetary Authority is to investigate a multi-billion dollar mismatch in the interbank cash market following Tuesday's confusion after the close of the Dao Heng Bank floatation. It is understood the $836 million Dao Heng offer may have been 200 times oversubscribed, tying up $200 billion in applicants' money. On Tuesday some $32 billion passed through the Liquidity Adjustment Facility account established as a lender of last resort for Hong Kong banks. Joseph Yam, chief executive of the authority, admitted yesterday the interbank market had failed to function correctly on Tuesday. The authority is now planning to question banks and other financial institutions on what went wrong. One problem already identified is late deadlines for share applications. The receiving banks in the Dao Heng offer did not know how much money had been drawn in from investors until late in the afternoon while institutions which had lent heavily to share stags found themselves facing an early morning liquidity crunch. Instead of matching cash shortages to surpluses, the interbank market stalled. The imbalance, which may have resulted in institutions breaching liquidity guidelines, was not corrected until the Liquidity Adjustment Facility was opened late in the afternoon. Mr Yam said a simple measure to improve things in the future could be to move application deadlines back from noon to 10 am. But Mr Yam also admitted his own guidelines to banks on interbank lending may have been a minor contributing factor to the problems faced by the market.