Liquidity and financial markets
Liquidity is defined formally in many accounting regimes and has in recent years been more strictly defined. An asset's liquidity can change. A Treatise on Money. Archived from the original on 31 January Retrieved 2 May
Banks can generally maintain as much liquidity as desired because bank deposits are insured by governments in most developed countries. Archived from the original on 31 January An asset's liquidity can change. A Treatise on Money.
In the futures markets liquidity and financial markets, there is no assurance that a liquid market may exist for offsetting a commodity contract at all times. Liquidity is about how big the trade-off is between the speed of the sale and the price it can be sold for. Retrieved 27 May
An asset's liquidity can change. There is also dark liquidityreferring to transactions that occur off-exchange and are therefore not visible to investors until after the transaction is complete. Market liquidity and financial markets seek to profit by charging for the immediacy of execution: Financial institutions and asset managers that oversee portfolios are subject to what is called "structural" and "contingent" liquidity risk. From Wikipedia, the free encyclopedia.
It does not contribute to public price discovery. When stock prices rise, it is said to be due to a confluence of extraordinarily high levels of liquidity on household and business balance sheets, combined with a simultaneous normalization of liquidity preferences. The change in the asset's liquidity is just based on the market liquidity for the asset at the particular time or in the particular country, etc. Initial buyers know that other investors are less willing to buy off-the-run treasuries, so the newly issued bonds have a higher price and hence lower yield.