# Liquidity premium

- Canonical URL: https://www.gerhardmerk.de/liquidity-premium
- Post ID: 593364
- Modified: 2023-07-25T21:01:58+00:00
- Language: en

## Definition

The price someone is willing to pay, usually in the form of a lower return, for a liquid asset compared with an illiquid one. - In the case of a loan, the compensation included in the interest rate for the fact that the creditor cannot dispose of the money lent during the term of the contract. - See liquidation, maturity premium, liquidity position, liquidity premium theory, liquidity preference, liquidity ratio, quick ratio, interest rate risk. - Cf. ECB Monthly Bulletin of April 2008, pp. 26 et seq. (liquidity premia and break-even inflation rate: explanations, overviews), Deutsche Bundesbank Monthly Bulletin of July 2008, p. 36 (premium for privately placed public bonds). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1