Unless otherwise defined, the ability to sell assets and, in particular, financial products at any time at a reasonable price in order to raise cash (the relative ease in which an asset can be sold quickly at a price close to the price at which similar assets are selling). If this possibility is closed off, as was the case in the slipstream of the turmoil surrounding the subprime crisis, liquidity problems with far-reaching consequences for institutions can very easily arise. – See effects, liquidation, forms of liquidity, market liquidity, fungibility. – Cf. ECB Monthly Bulletin, February 2008, p. 103 (bottlenecks caused by lack of tradability).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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