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Illiquidity in sentence

27 examples of Illiquidity in a sentence

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.
Eighth, once a correction occurs, the risk of illiquidity and fire sales/undershooting will become more severe.
But a series of recent shocks suggests that macro liquidity has become linked with severe market illiquidity.
So what accounts for the combination of macro liquidity and market illiquidity?
This combination of macro liquidity and market illiquidity is a time bomb.
Macro liquidity is feeding booms and bubbles; but market illiquidity will eventually trigger a bust and collapse.
There is an equally important need to distinguish between state insolvency and illiquidity.
First, the problems of the eurozone periphery are in some cases problems of actual insolvency, not illiquidity: large and rising public and private deficits and debt; damaged financial systems that need to be cleaned up and recapitalized; massive loss of competitiveness; lack of economic growth; and rising unemployment.
The proposed mechanism distinguishes between illiquidity, impending insolvency, and full insolvency.
The fall in oil prices – together with market illiquidity, the rise in the leverage of US energy firms and that of energy firms and fragile sovereigns in oil-exporting economies – is stoking fears of serious credit events (defaults) and systemic crisis in credit markets.
Rajan saw that something potentially dangerous was happening, warning that competition forces were pushing financial markets “to flirt continuously with the limits of illiquidity” and concealing risks from investors in order to outperform competitors.
Second, while monetary policy has limited impact when the problems are excessive debt and insolvency rather than illiquidity, credit easing, rather than just quantitative easing, can be helpful.
Fourth, large-scale liquidity provision for solvent governments is necessary to avoid a spike in spreads and loss of market access that would turn illiquidity into insolvency.
They would not bankrupt the EMF, which would be able to lend only in cases of illiquidity, not insolvency.
So, despite revulsion on the part of Germany and the European Central Bank at the idea of a “bailout,” Greece needs large official financial support this year at rates that are not unsustainable to prevent its current illiquidity from devolving immediately into insolvency.
It is possible that an EMU government will come close to insolvency or illiquidity.
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.
But bank deleveraging (brought about by stiffer regulatory requirements), together with negative interest rates, caused financial institutions’ equity prices to fall, leading to further pro-cyclical destruction of value through price deflation, increasing illiquidity, and crowded exits.
Provision of liquidity by an international lender of last resort – the European Central Bank, the International Monetary Fund, or even a new European Monetary Fund – could prevent an illiquidity problem from turning into an insolvency problem.
Undeterred by Argentina’s history of chronic volatility and episodic illiquidity – including eight prior defaults – creditors gobbled up as much debt as the country and its companies would issue, including an oversubscribed 100-year bond that raised $2.75 billion at an interest rate of just 7.9%.
Owing to various regulatory restrictions and the illiquidity premium, the pre-tax returns on these asset classes tend to be higher.
To explain Argentina’s chronic instability and episodic illiquidity, one must look beyond idiosyncratic leaders, temporary external shocks, and specific policy mistakes.
Now, as then, companies and households are facing insolvency, not illiquidity.
Austerity might have worked if the only problem had been temporary illiquidity.