Illiquidity
in example sentence
Excessively loose liquidity and negative real interest rates obscure the credit risks in the system, while excessively high real rates could transform
illiquidity
into insolvency.
More example sentences with word illiquidity
To be sure, the many risks facing emerging markets still call for a highly differentiated stance, as market
illiquidity
can magnify the impact of shocks on prices.
Third, while the relative
illiquidity
of emerging markets has always demanded extra care, the liquidity risk premium for emerging-market assets may be more pro-cyclical than in the past.
Above all, the central bank must ensure that the money supply is large enough that mere illiquidity, rather than insolvency, does not force banks into bankruptcy and liquidation.
But they must also be wary of analysts who are either incapable of, or uninterested in, distinguishing between causality and correlation, and between insolvency and
illiquidity.
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