August 28, 2015

The illusion of liquidity

Financial markets are currently concerned with the lack of trading liquidity despite the actions of central banks to maintain a seemingly unlimited supply of money.

There are two types of financial liquidity: The first is funding or the supply of money, and the second relates to the ability to buy and sell financial assets readily and without high transaction costs. Central bank policies have simultaneously created an abundance of money and a contraction of trading liquidity.

Read more: http://forbesindia.com/article/column/satyajit-das-the-illusion-of-liquidity/40941/1

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