Example collocations logo

Liquidity in sentence

1284 examples of Liquidity in a sentence

The ECB’s Lethal InhibitionBERKELEY – Last December, with Europe’s financial system on the brink of disaster, the European Central Bank stunned the markets with an unprecedented intervention, offering banks across the eurozone essentially unlimited liquidity against any and all collateral for an exceptional period of three years.
The ECB’s surprise liquidity operation put the continent’s crisis on hold.
The United States Federal Reserve injected liquidity, as did other advanced countries’ central banks.
The injection of liquidity that occurred over the last year was the right policy.
The impact will be particularly powerful in emerging countries, where currencies are vulnerable to a rising dollar and tightening liquidity conditions in the US.
They might resort to the inflation tax and inject the national currency to restore liquidity to their banking systems and financial markets.
The ECB has provided essentially unlimited amounts of liquidity to euro-area financial systems.
This renders them dependent on interest rate hikes to attract – via the market and on swap lines from the ECB – the euro liquidity that their banks desperately need.
Who bailed out the banks, pumped in the liquidity, engaged in fiscal stimulus, and provided the safety nets for the unemployed to thwart an escalating catastrophe?
The Basel 3 Accord, adherence to which increased the liquidity of all banks and decreased their leverage, is viewed as a firm standard in some parts of the world.
Russia, which is in the midst of a liquidity crisis, will struggle to raise such huge sums; failure to comply, however, would jeopardize future foreign investments.
But this danger can be countered by requiring banks to operate as legally incorporated subsidiaries, with locally regulated capital and liquidity reserves, and strong regulatory limits on the maturity of their funding.
Pushed further away from best-case scenarios, they are unable to ignore the global liquidity impact of the Fed’s policies, yet they lack the right policy tools to address it.
Increased liquidity in international capital markets also reduced the need to obtain multilateral financing, and with it the need to accept conditions like privatization of natural resources and deregulation of public utilities.
It has a president who has encouraged the idea of a government shutdown, fueling doubts about the liquidity of the market in US Treasury bonds.
If they remove the stimulus too soon by raising taxes, cutting spending, and mopping up the excess liquidity, the economy may fall back into recession and deflation.
In the meantime, liquidity provision by the European Central Bank is the only way to prevent a collapse in the price of bonds issued by several European countries.
With no more evidence than that, a structuralist model would predict an inflation rate that is already elevated and rising – and the inflation rate is not running high, even though the US Federal Reserve has flooded the economy with liquidity.
By contrast, the Bank of England’s reluctance to provide liquidity – because of concerns about “moral hazard” – was a poor choice.
Out of Step at the ECBThe European Central Bank remains seriously out of step with other key central banks in the industrial world despite recently announced coordinated efforts to increase short-term liquidity in the banking system.
Or consider the claims – also rampant these days – that further government attempts to increase demand, whether through monetary policy to alleviate a liquidity squeeze, banking policy to increase risk tolerance, or fiscal policy to provide a much-needed savings vehicle, will similarly fail.
Banks’ balance sheets are systemically dangerous when bloated by leverage, and it is this that regulatory or fiscal policy should address through liquidity buffers and leverage ratios.
Liquidity risk is best hedged through diversification across time.
But, while banks with short-term funding and many branches originating loans have a deep capacity for holding credit risks, they have a limited capacity for holding market risks, and little capacity for holding liquidity risk.
Insurance companies and pension funds, on the other hand, have limited capacity for credit risk, but more for market and liquidity risks.
The credit channel also is not working properly, as banks have hoarded most of the extra liquidity from QE, creating excess reserves rather than increasing lending.
But the reasons behind China’s massive liquidity growth – and the most effective strategy for controlling it – are less obvious.
In 2011, China accounted for an estimated 52% of the world’s added liquidity.
Indeed, the rapid expansion of bank credit needed to finance skyrocketing government-led investment is increasing the amount of liquidity in China’s financial system.
This generates liquidity, which then stimulates GDP growth.
BackNext