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Liquidity levels and liquidity risk
Recent evidence suggests that overall levels of market liquidity remain high, with only a few market segments showing signs of worsening liquidity. At the same time, some of the structural changes observed in recent years may have increased liquidity risk. In particular, the October issue of the International Monetary Fund's Global Financial Stability Report (GFSR) finds that the resilience of market liquidity, i.e., the speed at which market liquidity recovers after a bad shock, may have declined significantly. On the other hand, recent research by the Federal Reserve Bank of New York looking at alternative measures of liquidity risk, finds no evidence of an increase in risk. More info
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