The liquidity of a financial instrument is often overlooked, as investors strive to produce the best risk adjusted returns. Market liquidity usually fluctuates, but may be extremely illiquid as ...

To calculate the real risk-free rate, subtract the current inflation rate from the Treasury bond yield that matches your investment duration. If, for example, the 10-year Treasury bond yields 2% ...

The ECB’s latest guidance draws a direct line from those events to today. By strengthening intraday oversight, it aims to mitigate systemic risk at source with expectations that reflect both the ...

On June 17, the working group released draft revisions to its Principles for Sound Liquidity Risk Management and Supervision, which were originally published in 2000. Changes to the principles were ...

Intuitively, we should expect liquidity risk to be priced very differently during good economic times and bull markets (such as the 1990s) than in times of crisis and bear markets (such as 2008).

Investing is naturally a risky proposition, and there are specific types of risk to be aware of when deciding where to put your money. Liquidity risk is one of them. Broadly speaking, it refers to ...

They treated this as a free lunch, when it was compensation for risk. The liquidity risk reared its ugly head in the crisis of 1998. Liquidity also affects corporate bond spreads.

A liquidity premium is the extra compensation required to get an investor to buy a security that is more difficult to sell quickly at a fair market price than an alternative. In other words, a ...

Liquidity risk management is a necessary component of a firm-wide risk management system. Even though the challenges in establishing and maintaining such a system are substantial, serious efforts by ...

Liquidity carries lower risk because short-term issues can be caught early in the process, while solvency carries long-term risk. Experts recommend investors study companies’ trending data and ...