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Liquidity in sentence

1284 examples of Liquidity in a sentence

Critics have complained that it would reduce liquidity in important markets, such as those for non-US sovereign debt.
As for liquidity, while on the surface it looks deeper, the joint report on the Flash Crash prepared by the US Securities and Exchange Commission and the US Commodity Futures Trading Commission shows that HFT traders scaled back liquidity sharply, thereby exacerbating the problem.
The liquidity that they apparently offer proved unreliable under stress – that is, when it is most needed.
Isn’t this a once-in-a-lifetime opportunity to move away from a world where the US Federal Reserve and the European Central Bank hold the supply of international liquidity in thrall?
But, because they flooded global markets with liquidity, large portfolio flows have moved into emerging-market countries, whose currencies often are not as liquid as the dollar.
Seeing Double at Central BanksOXFORD – Central banks are now targeting liquidity, not just inflation.
The change reflects central bankers’ argument that to target credit or liquidity requires another tool.
So the FPC would wield instruments such as capital ratios or loan-to-value ratios to manage liquidity, and placing two instruments for two targets – liquidity and inflation – within the BOE would ensure coordination.
Because both the FPC and the MPC rely on a monetary-transmission mechanism that operates through banks, it isn’t clear that inflation-targeting and liquidity maintenance can be so neatly separated.
Closer to Britain, the ECB is potentially embarking on a tightening cycle and withdrawing hundreds of billions of euros in liquidity provided during the crisis, owing to concerns about “addicted” banks.
The cure for this mode – a liquidity crisis caused by declining confidence in the financial system – is to ensure that banks and other financial institutions with cash liabilities can raise what they need by borrowing from others or from central banks.
At the start, the Fed assumed that it was facing a first-mode crisis – a mere liquidity crisis – and that the principal cure would be to ensure the liquidity of fundamentally solvent institutions.
Having run out of basis points to cut from interest rates, the Fed has turned to the quantity dimension of the credit cycle – injecting massive doses of liquidity into the collapsed veins of zombie consumers.
Far more disconcerting is the willingness of major central banks – not just the Fed, but also the European Central Bank, the Bank of England, and the Bank of Japan – to inject massive amounts of excess liquidity into asset markets – excesses that cannot be absorbed by sluggish real economies.
Liquidity injections into a zero-interest-rate developed world send return-starved investors scrambling for growth opportunities elsewhere.
By selling troubled assets in the secondary market, commercial banks could strengthen their balance sheets while avoiding liability increases and enhancing asset liquidity.
The proposal would also have required that money-market funds hold back a fraction of some redemptions, thereby making investors take some risk that funds might not have complete transactional liquidity if their investments weakened.
The rejected proposals are thus good policy: money-market funds should be made safer – via capital requirements and liquidity restrictions – because they already receive a de facto government guarantee.
Despite the trials and tribulations of the American economy, dollar securities remain the dominant form of reserves because of the unparalleled depth and liquidity of US markets.
The dollar originally acquired international currency status in the 1920’s, when the newly established Federal Reserve started buying and selling dollar acceptances, backstopping the market and enhancing its liquidity.
The IMF would have to be able to issue additional SDRs in periods of shortage, as when the Fed provided dollar swaps to ensure adequate dollar liquidity in the second half of 2008.
At the moment, countries holding 85% of IMF voting power must agree before SDRs can be issued, which is no recipe for liquidity.
Japan’s revival, meanwhile, was caused by a much-needed liquidity injection.
On the other hand, juxtaposed against these positive developments are a fresh set of challenges, namely increasingly pro-cyclical liquidity provision by market makers, the rise of populism, and a temptation to rely on currency depreciation as a substitute for structural reforms.
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.
At the same time that regulatory changes have reduced the intermediation capacity of traditional liquidity providers, new, computer-driven intermediaries with negligible capital buffers have made it easier to flee the market when volatility rises.
The bad news is that liquidity disruptions are likely to occur more frequently, requiring careful attention to the size of illiquid exposures in periods of low volatility.
The reason is simple: while base money is soaring, the velocity of money has collapsed, with banks hoarding the liquidity in the form of excess reserves.
Sixth, while regulatory reform that increases the liquidity and capital ratios for financial institutions is necessary, those higher ratios should be phased in gradually to prevent a further worsening of the credit crunch.
Capital outflows of this magnitude are likely to have myriad effects: drying up liquidity, increasing the costs of borrowing and debt service, weakening currencies, depleting reserves, and leading to decreases in equity and other asset prices.
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